The banks new willingness to lend is still handicapped by the National Credit Act

The banks' new, very welcome willingness to lend money for residential property is giving a noticeable fillip to the market and is beginning to reinstate the banks' image. It is also bringing homebuyers and investors back into property.

However, the National Credit Act, "a very necessary but onerous piece of legislation", is severely limiting the banks' ability to lend as much as they have available for residential housing. Some banks are at least 30% down on their lending budgets.

This was said last week by Bill Rawson, Chairman of Rawson Properties, in a review of where South African residential property stands at the moment.

"Those who have been waiting for the reinstatement of 100% bonds," said Rawson, "are finding it particularly difficult despite the banks' readiness now to help in this matter. They still have to be able to prove significant income levels not just for the last few months but often for as much as six or twelve months."

This inability to lend to the hilt, said Rawson, is one factor that is slowing down the long awaited pick-up in GDP growth.

"There is," he said, "still a strong appetite for property investment, particularly for new homes in security villages. Many buyers and investors are prepared to pay a fairly high premium for a new hassle-free home and this is just as well because at present used homes can be had at quite a big discount to newly developed properties."

Rawson Developers and Home Builders, he said, have several schemes in the pipeline, most of which are joint ventures, some to be launched before the end of this year and others in 2010.

"We are finding," said Rawson, "that landowners and smaller developers are enthusiastic about the concept of entering into joint ventures with developers who are prepared to share not only their resources but also their expertise, particularly design, planning, budgeting and marketing ability."

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