Entrepreneurship Q&A

Do you have questions on the financing needs of your business? Fin24.com has a panel of experts on standby to answer queries.

PODCAST: Lessons from Abroad

Think it's easier to start a business in the US as opposed to SA? Listen to Fin24.com's entrepreneurship experts.
Where am I? Fin24.com

No to 61% of bond applications

Mar 10 2009 07:31 Elma Kloppers Print this article  |  Email article

Related Articles

SA house market on edge

House prices take another hit

Tough year ahead for house sector

 

Johannesburg - Almost two-thirds of all home loan applications are currently being rejected by banks, a trend that could further strangle the housing market.

Market conditions are, however, such that banks will not relax their lending criteria soon.

The percentage of home loan applications turned down leapt to 61.2% in February, compared with 41.3% in February last year, according to the latest figures from ooba (formerly MortgageSA). This represents an increase of 19.9 percentage points

At the same time the proportion of applications declined by one bank but approved by another fell to 20.3%, compared with 38.6% in February last year.

"Banks have tightened their lending criteria even more since December last year, and if these criteria are not relaxed soon, the housing market will be under further strain," observes ooba chief executive Saul Geffen.

He says banks are demanding significantly higher deposits. The average deposit as a percentage of the purchase price was 24.1% (R200 248) in February, compared with 16.4% (R137 307) last year.

Property analyst and valuer Erwin Rode of Erwin Rode & Associates says prospective buyers will have to save for a deposit as they did 30 years ago.

According to ooba the average purchase price was R827 553 in February, compared with R833 461 in 2008.

Absa's group managing executive for securitised loans in the retail division, Gavin Opperman, says the bank will not be relaxing its mortgage lending criteria before the end of the year, or even the beginning of next year.

"The impact of global and local economic conditions is still rippling through the market and at this stage banks have to adopt a conservative and cautious approach to mortgage lending."

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

  • page

 

Comment on this story

(No bad language or hate speech, please)
Comments for this article have been closed

Indicators

Last updated: Fri 00:00

View data hub

Company Snapshot

Make money from art
Sep 02 2010 12:48

Art's nicer to look at than stock and bond certificates, but can it make you money? Fin24.com spoke to the experts about this alternative investment class. Time: 3:00

Compare and Buy

Compare and apply for hundreds of financial products from many suppliers.

Credit cards Medical aid Current accounts Think Money

Money Clinic

Money Clinic Do you have a question about your finances? We'll get an expert opinion.
Click here...

Loading...