Housing in Southern Africa February 2015

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February 2015
Housing
‘The smart
bond is a tool which can be used
to go through the application
process and then go shopping,
rather than finding out if they
qualify mid-way through the
process. This way is more
empowering.’
costs are comparable with the top
end of the market. This needs to be
addressed as this cost has not been
factored in for the Gap and affordable
housing market.”
Lee goes on to explain that we
need to do thingsmore efficiently and
with a lot less cost, in order to benefit
this sector.
On interest rates, general senti-
ment anticipates between 1% and
1,5% interest
rate hikes with-
in the next two
years. “It is im-
portant to note
that there are
ways in which
customers can
mitigate the im-
pact of interest
rate increases.
By choosing a
fixed rate for
three to five years, will help consum-
ers weather a current uncertain inter-
est rate environment.”
In terms of scorecards and the fact
that the majority of South Africans
have impaired credit records, we
asked Lee have there been any im-
provements in the approval rates?
“We have found that two in ten con-
sumers have impaired credit records
as they have not recovered from bad
judgements and theywill be declined
outright. Whilst the majority, six out
of ten consumers apply for prop-
erties that are
just too expen-
sive for what
they can afford
at this point in
time. Two out
of ever y ten
consumers still
have impaired
credit records
but have held
steady and not
incurred more
debt.”
FNB offers consumers
a tool that they can
complete to see if they will qualify
for a home loan. The
smart bond is a tool which can be
used to go through the application
process and then go shopping, rather
than finding out that they do not
qualifymid-way through the process.
This way is more empowering.”
Lee is passionate about consumer
education, “As a finance institution
we compete rather aggressively
but one thing that we need to keep
in mind is the need to educate our
customers. Lack of information or
sharing, will potentially jeopardise a
consumer’s wellbeing.
It is important that the consumer
understands the entire process from
mortgage originator to the role of the
real estate agent etc.
What ownership entails includes:
basic maintenance, the National
Home Builders Registration Council
building requirements and codes for
all additions, such as garages, addi-
tional extensions, walls, free standing
buildings etc. The implications of hav-
ing a bond on the property.
“As banking institutions we tend
to focus on the happier side. There
is however an unfortunate sad side
when people fall into difficulties.
They need to knowwhat options they
have andwhat it couldmean for their
overall financial wellness. Consumer
education needs to happen on an
ongoing basis. If we educate consum-
ers, the market will benefit from it,”
concludes Lee.
When Lee talks about consumer
education, he has a deep sense of
commitment toward consumers,
which is certainly not just platitudes
or political correctness in a bid to gain
market favour or share. ■