select
|

SA bond originators radically outperform the national averages in achieving bond acceptances

Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, has drawn attention to a prediction from Absa and their chief property analyst, Jacques du Toit, who says that the property market is likely to continue to show relatively subdued levels of market activity, transaction volumes, price growth and demand for mortgage finance this year.

“The Absa report”, said van Alphen, “makes it clear that this will be due to household credit growth remaining firmly in the single digit bracket this year.”

“Absa’s figures”, he said, “also show that year on year growth in private sector mortgage loans was 2,6%, while growth in outstanding mortgage balances was only marginally higher at 2,8% - obviously an unsatisfactory growth rate for an emerging economy.”

The report, says van Alphen, also records that general loans and advances, credit card debt and overdrafts growth rates dropped to 7,7% year-on-year, and, as it always has to be accepted that in tight lending conditions, mortgages will always be held back, it is unlikely that we will see a significant increase in home financing for some time to come.

But, says van Alphen, these rather disheartening figures have to be assessed along with those from the major bond origination organisations, including Rawson Finance, which have all shown significant growths in turnover in the last year. Rawson Finance, says van Alphen, has seen a 35% increase in turnover year-on-year. How can this be explained in view of the uninspiring national figures for bond acceptances?

According to van Alphen, demand for home ownership, especially below the R1 million mark, is at the moment very strong indeed, possibly at a higher level than ever seen before in South Africa.  However, he says, a very high percentage of potential buyers have been having their bond acceptances rejected because they were putting in applications without fully understanding the criteria on which banks work. 

“In situations of this kind”, said van Alphen, “bond originators can perform a valuable role in holding back the application until the factors which might disqualify it, with their help, are rectified.  As a result, companies like Rawson Finance, have been achieving a 65 to 70% acceptance rate – and the good news is that in the current situation, although roughly half the applicants are ruled out because of impaired records, 52% of credit active South Africans are assessed by the credit bureaux as being acceptable for a bond.”

This, says van Alphen, is more than sufficient to keep the residential property market alive, albeit not booming and gives considerable hope that, with inflation reined in below 6% in 2015 and 2016 (as it is now predicted it will be), we can look forward to improved prices in house sale volumes and values from now on.  For the foreseeable future these will, van Alphen agrees with Absa, be below 10% but, he predicts, in 2015 and 2016, house prices could once more remain steady in the double digits bracket. 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK