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WHILE property prices have begun picking up from the recession, banks have yet to see the same being translated to more new homeowners in the affordable housing market.
The four major banks, Absa, FNB, Nedbank and Standard Bank, have not seen an increase in the number of home loans being approved on a daily basis in recent months. These are houses ranging between R300000 and R600000 (two or three bedrooms, living room, kitchen and bathroom).
None of the banks could quantify how many loans were approved or declined per day.
Marius Marais, chief executive of FNB housing finance, described the situation in affordable housing as constant.
"There is neither a decline nor decrease in this housing segment, which is interesting because we have seen a significant increase in property prices," he said.
"The reasons is that when people apply for home loans they are still indebted to micro-loans such as clothing accounts, which makes them unable to afford the houses.
"We want to advise people to settle their short-term debt before looking to buy property." .
But Marais said an estimated five to 10 percent increase in the segment was expected towards the end of the year. He said the bank had educational programmes to help first-time home buyers with budgeting, insurance and maintenance of property.
FNB handles between R55million and R60million worth of applications a day.
Vuyi Hlabangani, Absa's head of affordable housing, said the bank experienced a marginal increase in applications from the lower income segments.
"The global recession has negatively impacted the property market with subdued house price growth. In addition, high household debt has resulted in depressed demand due mainly to affordability," Hlabangani said.
"Lower interest rates have given consumers an opportunity to settle high household debt. But there has been marginal improvement in volumes recorded in 2010 when compared with 2009."
Pat Lamont, Nedbank's home loans general manager, said the bank was approving the right kind of people in the affordable housing market.
"The whole of last year we discovered that some of the loan approvals were relatively lower. People were losing jobs and we realised that we should focus on quality," Lamont said.
Since interest rates have gone down we've put focus on quality - which is sustainability of the home loan."
Funeka Ntombela, Standard Bank's director of home loans, said: "Customers from across segments have been adversely affected by the harsh economic conditions that hit the country so severely.
"We are trying to assist our customers in the best way."