Racial Demographics of SA Home Loan Applications Changing

June 25 - There have been some interesting racial demographic changes in the South African home loan process in the past few years, revealed ooba, the industry leading bond originator.

According to the group, the number of white applicants for property mortgage in South Africa has been consistently lower than the combined number of Black and Coloured applicants over the past few years.

The number of Black applicants who asked for home loans from banks rose to 42% in 2009, while Asian and Coloured applicants made up around 8% and 7% of the applicants.

Getting the loan approved continues to be difficult for all races, according to ooba.

"The stricter bank lending criteria imposed under the NCA has also made it particularly tough for first time home buyers who aren't able to meet the affordability criteria," said Saul Geffen, Chief Executive Officer of ooba.

Geffen said that the percentage of Black applicants will continue to rise as the market continues to improve.

"We expect to see an increasing percentage of Black buyers in line with the shifting economic base in South Africa," he said.

Regarding the types of properties for which South Africa home loan applications were made, Geffen said that for homes priced under R500,000, the majority (60 - 70%) were Black applicants.

For properties valued at between R500,000 and R1 million, Blacks made up 30% of applicants, while homes valued at over R1 million saw around 10 - 20% of the applicants being Black.

These interesting trends reflect the changing demographics of South African society.

6/25/2010 9:35:04 AM