New bank to boost buying in lower brackets

THE INCREASE in the number of affordable housing developments has made it possible for many first-time buyers in the lower to lower-middle income price bracket to finally own their own homes.

Lightstone statistics reveal that a number of suburbs in the top 10 Cape Town suburbs are predominantly lower-income areas. (See story, left.)

These numbers could grow when the new Human Settlements Development Bank, which aims to enable as many people as possible to own their own homes, opens in October.

CEO Samson Moraba says the bank is setting up processes and mechanisms to get it up and running by the set date, when they expect public servants who are in the gap market to start streaming through the doors to seek mortgages.

Moraba says they aim to help as many people as possible to own their own homes.

Up to now, many people, including 3 million people in the public sector, could not get help from commercial banks because the banks were averse to risk.

The Human Settlements Development Bank will be able to assist this share of the market and provide the necessary home finance.

Moraba says the government employee scheme has 1.2 million people, but “if you include the rural market, because there are teachers and nurses in rural areas, it is between 2 and 3 million people”.

When the bank becomes operational in October, it will seek to penetrate the market, says Moraba.

The main target market for the bank is the gap market, which comprises South Africans who earn too much to qualify for RDP houses, but not enough to qualify for mortgages from the mainstream commercial banks. – IMS Politics