Search My Portfolio Developers About Us Contact Us ShareShare
 
    State Of The Nation Address Comment   Mail Print PDF

Unemployment and access to finance have been the two dominant factors that have prevented consumers, especially first-time buyers, from entering the property market and investing in a home in recent years.

While it is understood that the financial institutions had to revise their loan criteria in order to ensure responsible lending practices, this has done little to improve the housing needs of the country.

However, the recent State of the Nation Address by President Zuma contained encouraging news for those affected by the housing backlog and those who are unable to gain access to finance, given government’s renewed commitment to grow the economy and continue to tackle unemployment.

Already unemployment levels have seen improvement, with President Zuma pointing to the fact that even during the times of an economic and property boom from 2003 to 2008, unemployment did not fall below 20%. The fourth quarter figures for 2011 indicate that the rate of unemployment came down from 25% to 23.9% as a result of new jobs that were created. During 2011, which was declared as the year of job creation, a total of 365 000 people were employed, which President Zuma declared as the country’s best performance since the recession of 2008.

More importantly, what will undoubtedly have a massive impact on the property industry is the commencement of government funding to promote access to home loans, especially for first-time property buyers. First announced in 2010, this R1-billion guarantee is expected to come to fruition in April this year. To be run by the National Housing Finance Corporation, the guarantee will aid the country’s financial institutions in lending money to people who earn too much to qualify for RDP housing, but who earn too little to qualify for home loan finance.

Furthermore, from April 2012, people earning between R3,500 and R15,000 per month will be able to obtain a subsidy of up to R83,000 to enable them to obtain housing finance from an accredited bank.

estata expects that properties at the lower end of the market will show increased demand and increased value growth in the year ahead. Should employment opportunities continue to grow with a strengthening economy and government’s commitment to further reducing unemployment, and should the finance plan to increase opportunities for potential home buyers to access the necessary finance come about, the lower end of the property market will no doubt see even more growth and demand.

powered by estata

  estata, 16-02-2012 [ View all articles ]  
myportfolio
Viewed (24)
Previous Play Stop Next
Saved (0)
You have no saved objects.

Save projects that interest you for quicker access in the future and view them whenever you like ... read more

login to My Portfolio
Previous Play Stop Next