Mortgages not viable - SAIRR

About 83 percent of the nearly 14-million households in the country do not earn enough to qualify for bank housing loans, according to the latest SA Survey, published by the South African Institute of Race Relations (SAIRR) last week.

In 2009, approximately 60 percent of households earned R3500 or less a month and qualified for a full state housing grant while 16 percent of households had to make their own contributions to government-subsidised houses based on their income (R3500 —R7000).

About 7 percent of households earned between R7000 and R10500 — enough to disqualify them from government housing programmes, but not enough to get a bank mortgage.

About 5 percent (700nbsp;000 households) fell in an income bracket high enough to qualify them for bank finance in the affordable housing sector.

SAIRR said that the government provided a guarantee fund and acted as surety for applicants in this sector.

Only 12 percent (1.6-million households) earned enough to qualify unassisted for a bank mortgage.

The information was sourced by the institute from a 2011 report by the Financial and Fiscal Commission.

The Survey showed that the number of informal backyard dwellings rose by 83 percent between 1996 and 2010.

The publication noted that people who were on the waiting list of government housing programmes, and the majority of those that do not qualify for such programmes, often migrated to backyard dwellings that offered cheaper rentals.

"The income figures demonstrate the pressure on the state's housing delivery programmes with 60 percent of all households eligible for government-subsidised housing," said Mr Kerwin Lebone of the institute's research department.

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