Jun 22 2010 16:52 Print this article | Email article
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Johannesburg - Bond originator ooba said on Tuesday the data it has collated around home loan applications over the past three years revealed interesting trends around the racial demographics of property buyers in South Africa.
The most notable of these trends is that the percentage of white applicants has been consistently less than the combined total of black and coloured applicants over the last three years.
According to the data the proportion of black applicants has risen steadily over the last few years, averaging 42% during 2009. This number has however dipped in the first four months of 2010 to 38%.
In contrast, the proportion of white applicants has risen from an average of 43% in 2009 to 47% during the first four months of 2010. The proportion of Asian and Coloured applicants has remained constant since the beginning of 2008, averaging 8% and 7% respectively.
Saul Geffen, CEO of ooba, attributes the downward trend in the percentage of black applicants in 2010 to the fact that the tough economic conditions and stricter lending criteria have had a bigger effect on potential buyers at the lower end of the property price spectrum.
The data shows that potential black buyers make up 60% to 70% of total applicants for properties valued at less than R500 000. This proportion drops significantly to around 30% for properties valued at between R500 000 and R1m, and 10% to 20% for properties valued at over R1m.
"The stricter bank lending criteria imposed under the National Credit Act has also made it particularly tough for first time home buyers who aren't able to meet the affordability criteria."
However, Geffen said that as the economy recovers, the percentage of black buyers will likely re-commence its upward trend.
"We expect to see an increasing percentage of black buyers in line with the shifting economic base in South Africa."
- I-Net Bridge