More people are buying homes in groups as rate hikes bite, says FNB

FNB’s affordable housing book stood at about R20.5 billion as at end-June 2023, spread out across more than 70 000 low-income households.
– FNB’s collective-buying mortgage option, which allows up to 12 people to buy a home together, has seen a 41% book growth since its inception in August 2021.
– While affluent home buyers account for 77% of FNB’s collective-buying book in terms of value, this is partly due to their average loan size being R1.8 million compared to only R850 000 for affordable housing customers.
– FNB’s affordable housing book stood at about R20.5 billion as at end-June 2023, spread out across more than 70 000 low-income households.
– FNB defines the affordable housing segment as households earning a gross salary of between R3 500 and R29 600 per month.
– Gap housing customers typically rely on the government-backed First Home Finance scheme, which provides them with a grant of between R38 911 for the highest earners in this segment, with the subsidy increasing to R169 265 for the lowest earners.
– At the bottom of the housing market pyramid is what is typically referred to as the indigent market, which consists of customers grossing less than R3 500 per month.
– The majority of affordable housing lending activity occurs in South Africa’s main commercial hubs of Johannesburg, Pretoria and Cape Town.
– FNB has noticed a “peculiar” dearth of activity in the affordable housing market in Durban and even greater KwaZulu-Natal (KZN).

Link to the original story: https://www.news24.com/fin24/companies/more-people-are-buying-homes-in-groups-as-rate-hikes-bite-says-fnb-20231107