Good news for low earners wanting to buy homes

ABSA has launched its “MyHome” proposition which seeks to lower the barriers to entry for customers in the affordable housing segment.

“In our endeavour to be the go-to home loans bank in South Africa, we have taken a strategic decision to reposition our affordable housing proposition to be known as MyHome. It offers qualifying customers a solution that will address their housing needs – providing them with access to finance and enabling them to own their first home,” said Carel Grönum, managing executive of Absa Home Loans.

“South Africa has 53 million people, 15 million households and only 6million residential properties. Absa sees its role as a partner with the public sector in seeking to address this critical problem, by making access to affordable housing more readily available.”

Research also showed there was a housing backlog of between 2.1 million and 2.5 million, Grönum said. A selected panel of affordable housing developers builds about 20 000 houses a year. The housing shortfall is covered by informal, backyard and other types of housing.

“As a responsible corporate it is vital we join hands with the government in addressing the need to put people in homes – it’s a basic human need. Nothing provides more basic pride than owning one’s own home.

“The tough economic climate dictates that banks continuously review and consider more innovative ways to help our customers achieve their ambitions. Our responsibility is to present customers with workable financial solutions that enable them realise their dreams of owning their own homes.”

Grönum cited the background of increasing debt levels, deterioration in affordability and high levels of unemployment. Absa’s MyHome book is worth R9.2 billion, with more than 60 000 customers. The bank plans to grow the book to R15.4bn by 2017. The MyHome offering targets customers who, singly or jointly, earn an income of R18 600 or less.

“As Absa we are continually investigating how best to address the needs of this segment. This is why we are repositioning the ‘MyHome’ proposition to lower the barriers to entry for customers in the affordable housing segment.

“The new enhanced proposition introduces revised qualifying rules for affordable housing customers, making it easier for those who earn less than R18 600 to access home loan finance.

“As part of the MyHome proposition, Absa will be offering its customers a 30 percent discount on attorney bond costs and 30 percent discounts on bank initiation fees. The discounts will be available up to December 31 on approved applications.”

Buying a property is the single biggest and most important investment most people make, Grönum said.

However, many customers in the lower end of the housing market are not properly educated regarding their investment, largely because of the history of property ownership, access to finance and education.

To address this challenge, Absa has designed a first-time home buyer training programme, which is funded by the French Development Agency. It aims to educate 17 000 first-time home buyers by the end of December.

Research by Absa suggests consumers prefer to be educated before buying a home. It was with this in mind that Absa created its first-time home buyer training programme. It aims to inform customers about all aspects of buying and the owning of a home as well as sustainable home ownership.

“The private sector and the government have to join forces to fasttrack housing delivery and ensure there is more affordable housing stock. Absa Home Loans is committed to playing a pivotal role in addressing the housing challenges faced by many citizens.”