CREDIT ACT TO COMBAT INEFFIENCIES SAYS PROPERTY EXPERT

Inefficiency is never a good thing. And according to Barak Geffen, Executive Director of Sotheby's International Realty South Africa, the new Credit Act‘s main aim is to curb reckless lending and eliminate artificial impetus in the market through inappropriate use of credit.

 

“Sure, the time to secure a loan will be extended as details will need to be sourced from numerous parties, relating to an individuals overall credit status, fewer bonds will be approved, but the Act will benefit the housing market and the economy by eradicating the current artificial contribution of transactions in the housing market, by preventing the raising of bonds that end up defaulting, creating duplication of effort and expense from many different service providers involved in the industry,” Geffen says.

 

“The new credit act preempts problems that would arise later and won’t affect the ‘authentic’ market’s supply and demand factors. It will prevent multiple banks from being used opportunistically by buyers who over extending themselves opportunistically.

 

“Yes, there will be initial delays which will affect the market, but these will largely only a temporary, readjustment period.

 

“Eliminating inefficiency should be seen in a positive light for the economy, we must not lose focus – inflation and interest rates are our primary concern - not an initiative to eliminate inefficiency.”
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