Affordable housing market positioned well for the future
Values have in some instances gone up three-fold in just two years. “Phenomenal growth in property value has boosted residential development in the country,” says First National Bank (FNB) Housing Finance CEO, Marius Marais.
According to Marais, even if the rapid rise in property prices eases, there are other growth markets. “The positive sentiment towards property is also extending into properties that were overlooked in the past – principally houses in townships,” he explains.
“For the first time township properties have become assets to their owners and a healthy sales environment is emerging. It is an arena in which FNB will expand its role of providing finance and helping to reduce the housing backlog.”
He continues: “With the residential housing market being highly finance-dependant, creating more flexible lending conditions in all areas is a key issue that will notably increase accessibility to housing.”
Despite the government’s significant achievement in the delivery of over 1.6 million houses in the 10 years since 1994, there is still a sizeable housing backlog in the country.
As part of on-going efforts to address the problem, on 31 March 2005, the Minister of Housing and the country’s four major banks signed a Memorandum of Understanding in which all parties committed to creating functioning housing markets in previously under-served areas, and to making home loan finance available and accessible to low-income customers. This agreement emanates from the Financial Sector Charter signed in 2003.
Different approaches and interventions have been applied to address the lack of adequate housing in the country, and as part of its commitment to these efforts,
FNB has diversified its product portfolio to include a home loan called SmartBond.
The offering aims to be inclusive by also serving the target market as defined by the Financial Sector Charter. SmartBond is designed for people earning a single or joint gross monthly income of between R2 500 and R10 000.
Over and above easy access to a home loan, other key distinguishing SmartBond features include:
- A 5-year fixed rate resulting in fixed monthly instalments
- Affordable life insurance with no medical check required
- Full loan amount plus bond costs
“FNB believes that broadening access to credit will not only increase the quality of life for ordinary South Africans, but also create tremendous opportunities for residential development – boosting the country’s urban housing scene by enabling the development of properly planned and quality suburbs,” says Marais.
“Through owning property, more people will be able to grow their personal wealth. Property ownership is virtually a risk-free investment, so it’s a secure form of saving.” “Wealth creation for a broader base of South Africans is vital for the growth of the economy,” Marais concludes.
An Fnb Press Release :
First National Bank is a division of FirstRand Bank Limited.
An Authorised Financial Services Provider.