Breakthrough for black home buyers

Johannesburg - In January this year 50% of the applications for home loans for the first time came from black prospective buyers.

Three years ago the figure was only 30%, as indicated by new figures from mortgage originator Bond Choice.

The proportion of successful black mortgage applicants also increased, although nothing near the level of successful white applicants.

In January white buyers represented 40% of the applications for mortgage loans, while the balance showed an equal division between coloured and Indian buyers.

Bond Choice chief executive Richard Gray says the number of successful black mortgage applicants was 15% up as a percentage of the company's successful bond applications.

The average home loan in the affordable housing market was R450 000, he says.

This indicates that the changing economy is contributing to the emergence of a strong black middle class, which is also buoyed up by banks' relaxed lending criteria and 100% mortgage loans available to buyers in the affordable housing market.

Luthando Vutula, managing executive of Absa Home Loans, says the trend is also evident from Absa's figures.

He explains that from September last year to February this year applications for mortgage loans by black buyers increased to an average 51%.

Month on month the figure rose 3% over the period.

Although Betterbond also experienced an increase in Old Mutual home loans from black prospective buyers, more than 60% of the bonds approved in the past three months were for white buyers, the group reports.

Gray says the total number of applications for mortgage loans is increasing every month. It is however far from the 7  000/month level in boom times.

According to Vutula the number of approvals is also rising and there was a 21% increase in the total number between January and February this year.

- Sake24.com

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