27 October 2011
Standard Bank Group helps sustain South Africa's homeowners market
Standard Bank Group continues to support the South African housing market by financing almost half of all new home loans originated by local banks in the past year. This has helped provide much needed stability and liquidity to the local residential property market.
Funeka Ntombela, Head of Home Loans at Standard Bank South Africa, says the bank continues to process significant numbers of new applications, an indication that a level of consumer appetite for credit remains. In 2010 Standard Bank South Africa saw an increase of 71% in the number of mortgage applications it processed.
Standard Bank Group's financial commitment in granting almost half of new home loans in South Africa amounted to R31bn in 2010 and is set to exceed that figure for 2011.
"What the market needs right now is further liquidity to support the current house price levels. Low levels of lending by financial institutions could have the unintended consequences of depressing house prices further," says Ms Ntombela.
"In addition to buyers and sellers, the availability of funding is the key dependency for the property market. Standard Bank will continue to provide support to the property market in a responsible manner," she says.
In spite of pressure on selling prices, Ms Ntombela says the local housing market has weathered the global downturn relatively well. From 2008, economic seismic shifts caused property prices in many countries to fall to their lowest levels in decades. However the South African property market has largely managed to maintain asset value levels in nominal terms, says Ms Ntombela.
"The outlook for property prices is generally flat in nominal terms, with downside risk in high value properties. The lack of lending appetite is having a dampening effect on the property market," says Ms Ntombela.
Standard Bank Group remains the largest residential mortgage lender in South Africa and is well-positioned to take advantage of recovery in the economic conditions, she says.
"The growth in home loans granted by Standard Bank also demonstrates our tangible commitment to providing customers with access to credit for what is typically one of the biggest purchases they will make."