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The article seeks to provide innovative measures aimed at addressing the delivery of affordable housing market in South Africa in view of diminishing fiscus and rising interest rates. It defines the mortgage finance trends in South Africa through analysis of primary data from financial institutions to establish the level of activity and contrarians. Upon understanding the market challenges, the author recommends sound proposition with respect to engineering responsive interventions diversify with respect to demand and supply side blockages in the Affordable Housing Market in South Africa. Based on the findings, the author has found that interest rate increases have hurt the property market activity greatly and lenders in turn also apply very stringent underwriting standards at the height of high interest rate cycles. Furthermore, it has been established the mortgage credit impairments have increased resulting in significant credit loss as the majority of low- and middle-income households are overindebted and mortgage debtors are on the verge of being foreclosed on due to the risk of default. The article concludes by providing recommendations as interventions and measures aimed at upscaling the delivery of affordable housing in South Africa. 

This article reflects on social welfare system and governance of housing markets from an end-user perspective. The article criticallyanalyses the way in which social welfare has correlated to unsustainable development and created self entitlement behaviours andattitudes in the South African low income housing market. The phenomenon was demonstrable by empirical research whosefindings confirmed an existence of an association between a fully subsidized social housing model (as underpinned by South Africa’s social welfare) and propensity to default on mortgages. The study found that the risk of default by homeowners in the low income housing market in South Africa is influenced by government’s housing grant model. In other words, the research established that the principle of servicing a mortgaged starter property (that is almost similar to a government free house by both structure and design) is not universally accepted by homeowners of these mortgaged houses. The unintended consequences are that the system has created indefinite expectations that potentially could; (i) erode the country’s balance sheet; (ii) add to non-payment behaviour; (iii) pressurize the economic and credit systems; (iv) propagate entitlement attitudes and mindsets; (v) create social instability and (v) widened the country’s balance of payment deficits.

In investigating the non-payment phenomenon in South Africa’s low income households, a case study of Protea Glenx the researcher employed quantitative tools and qualitative methods. The rationale was prompted by high level of evictions and repossessions for non-payment of mortgages in the Protea Glen area in Johannesburg South Africa. The research approach was to measure and draw sample size from the units of population, conduct interviews and captureand analyse data through the use of SPSS as a suitable statistical instrument. Furthermore, the aim was to employ a suitable model for measuring the relationship between dependent and independent variables and also to highlight the limitations of the study. The findings of the study revealed several interesting empirical results that underpinning the importance of borrower education for mortgage account holders and the need by the banking sector to properly empower borrowers about credit behaviour, responsibilities and obligations of owning a property plus the ongoing costs of ownership.

This article was a result of an investigation measuring the ‘Correlation between Borrower Education and Non-payment Behaviour in Low Income Homeowners in South Africa as the premise of the study and poor relationship between lenders and borrowers as the secondary proposition. The study was motivated by the high level of foreclosures for non-payment of mortgages in the Protea Glen area in Johannesburg, Gauteng, as reported by the Human Rights Commission Inquiry in 2008. In investigating this non- payment behaviour the researcher employed largely quantitative instruments supplemented by qualitative methods. The study revealed interesting empirical findings that largely invalidated the founding hypotheses, despite existing theoretical frameworks - underpinned by various scholars - that sought to corroborate the hypotheses. The findings have however supported the premise that households reporting poor relationships with lenders were susceptible to non-payment behaviour. The rest of the secondary hypotheses were rejected by the empirical findings, viz. that there was no correlation between the level of formal education and non-payment behaviour; the link between propensity to default and the age of homeowners were also invalidated. From these findings, it can be demonstrated that there is a critical need for mitigating measures to remedy the identified shortcomings in this sector.

This paper is largely informed by the analysis of trends and developments in the Financial Sector Charter (FSC). Government and banks signed a Memorandum of Understanding in April 2005, in terms of which banks agreed to extend R42 billion for affordable housing in the five years to end-2008. This article therefore provides a critical examination with respect to FSC targets and deliverables. Moreover, the article seeks to investigate how the financial institutions under the FSC's backing have made credit more accessible and affordable for low- to middle-income households. Further, the article assesses the extensiveness of investment in low-income housing as stipulated by the Financial Sector Charter Council reports, in particular quantifying the picture of their advance book. The economic downturn and collapse of the credit and mortgage markets has eroded the effectiveness of the low-income housing market, making it difficult for banks and other lenders to finance low-income loans.

This paper is based primarily on the findings of a study carried out by the National Housing Finance Corporation (NFHC) in the first quarter of 2003. It sheds light about the nature and scope of the underlying reasons to the causes of defaults by tenants in the social housing rental market in South Africa. The methodology of this particular study was to conduct tenant survey through primary research across all 5 provinces covering 11 institutions. The overriding purpose was to uncover reasons leading to tenants defaulting on the payment of their rent installments. The purpose of this investigation has therefore been to gain an understanding of the underlying reasons for the reluctance of end-users to meet their financial obligations which impacts negatively on the funding institutions by conducting a tenant survey.

This article sheds light on the nature and scope of problems that impede the housing finance process in South Africa. The principal objective was to investigate obstacles that hinder the delivery of housing at scale to the lower- and moderate-income markets in South Africa. The conclusion: almost half of the market feels ill equipped to make informed purchase decisions, a large percentage lack information on financial products, and there is a huge demand for housing stock at the lower-end of the market.