SA’s mortgage lending declines to pathetic levels, says Stanlib
Loans to local home-seekers fall by nearly 5% since the subprime mortgage bubble in the US a decade ago
South African lenders have shrunk residential mortgage loans to households by 4.8% in real terms in the 10 years to 2018. Stringent lending criteria after the subprime mortgage bubble in the US and the introduction of the Consumer Protection Act have made financial services providers overly cautious, resulting in what Stanlib chief economist Kevin Lings called a “pathetic” mortgage lending rate in the country. During the Investment Forum in Sandton on Wednesday, Lings called the rate at which banks are lending to people to put a roof over their heads “pathetic” and it’s easy to see why. According to the Reserve Bank BA900s economic return data, financial institutions gave R10.9bn in residential mortgage loans to the household sector in 2018. This equates to a 40% nominal growth in residential mortgages to households since 2008 when these institutions lent R7.7bn to consumers. It’s a huge increase, until you factor in house price inflation over that period. The FNB house price inde...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.