NCA is shut­ting poorer buy­ers out

Business Day - Home Front - - NEWS -

CREDIT HIS­TO­RIES The rich in SA’s prop­erty mar­ket are get­ting richer while the poor get poorer be­cause of the way the Na­tional Credit Act (NCA) is be­ing ap­plied. So says Lew Gef­fen, chair­man of Sotheby’s In­ter­na­tional Realty in SA, who says: “The wealth­i­est home­buy­ers — or ac­tu­ally those con­sid­ered most cred­it­wor­thy by the banks — of­ten don’t ac­tu­ally need bank fi­nance, and so are able to up­grade and in­vest now at good prices which will en­able them to gain max­i­mum ad­van­tage from the next mar­ket up­turn.

“But the lack of ac­cess to credit be­cause of the way the banks are ap­ply­ing the NCA is shut­ting poorer buy­ers out of the mar­ket and deny­ing them the op­por­tu­nity to build wealth through home own­er­ship. The worst af­fected are black buy­ers who can af­ford monthly bond re­pay­ments but have not had time to build up ex­ten­sive credit his­to­ries or as­set bases that would make them bet­ter risks in the eyes of the banks.” In 2007 at least 25% of home sales by his com­pany were to newly-wealthy ben­e­fi­cia­ries of BEE. “But af­ter the in­tro­duc­tion of the NCA in 2008, the per­cent­age of black buy­ers in tra­di­tional sub­urbs dropped back to 15% and now we are back at 5% — which is where we were in 1994.”

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