NCA wreaks property havoc

[Eugene]

Black mortgage originators operating in South Africa's township property market are being hit by a double whammy.Firstly, they are still struggling to crack the white-dominated mortgage origination market and, secondly, the National Credit Act (NCA) is severely hampering their business.

Mortgage originators are sensitive to the performance of the property market and any dip in house sales puts pressure on their revenue because they earn commissions from acting as middlemen between lenders and homebuyers.The originators have become so powerful in the property market such that they generate about 70% of home loan sales for the banks.

The bigger the volumes they generate, the greater the profits they make.Nakedi Magodielo, the managing director of Agang Bond Originators, said the NCA had worsened their plight.He appealed to the government to intervene in the property industry to forcefully create opportunities for black originators, developers and estate agents.

Full report: http://www.fin24.co.za/articles/defa...518-25_2180176

[Dave A]

This part from the same story is actually quite curious.

Despite the NCA teething problems, black originators say the banks must help them to muscle their way into property developments that take place in the affordable housing market.

Maluleke said black originators should be dominating the township market but are struggling to compete with big firms such as Mortgage SA, Bondchoice, Betterbond and Wizard."

White originators are getting a bigger percentage of the emerging market than we do. We need to be given an opportunity to penetrate this market," he said.

Why are "white" originators getting a bigger percentage of the emerging market?

[QUINN]

Dave
I think it is just because we have been in business longer,
I noticed the trend in " township" property 2 years ago and ow 70% of my business originates there.
I have teamed up with the only BE empowered BO in the country and it has made a big difference.

I have noticed that every time a startup business or new industry is created they cry for government intervention in difficult situations.....what happened to entrepreneurship?

[Dave A]

I have noticed that every time a startup business or new industry is created they cry for government intervention in difficult situations.....what happened to entrepreneurship?

It certainly runs the risk of encouraging weak entrepreneurship if not handled correctly.