South Africa’s mortgage markets are not growing. While origination grew in real terms between 2010 and 2015, the nominal book value of bank mortgages remains below pre-Global Financial Crisis levels in real terms. At the height of the expansion in the mortgage market in 2005, when the market grew 43% year-on-year in loans paid out, new loans accounted for roughly 60% of the total book value. In 2017, this was at 20%. In 2007, 14.5% of households in South Africa had a mortgage. By 2016, this had declined to 9.7% of households. Critically, the contraction of the mortgage market has been especially acute for low income earners.
This presentation sets out an analysis of South Africa’s mortgage markets, considering market performance with respect to borrowers, properties, lenders and governance. The presentation reviews data commissioned by CAHF on the profitability and market potential of the affordable housing market in South Africa.
The full research paper underpinning this presentation is available here.
This work was supported by the Cities Support Programme of the SA National Treasury and GTAC.