Cape Town - Allegations of racism by financial institutions when it comes to granting township people mortgages to buy houses were aired at a hearing in Cape Town into two property bills.
The two bills discussed were the Property Practitioners’ Bill, which will repeal the Estate Agency Affairs Act of 1976 when it is enacted, and the Home Loan and Mortgage Disclosure Amendment Bill, which sets out the disclosure requirements for home loans and mortgages.
Khayelitsha estate agent Zola Mekula, who owns Zola M Properties, said with regards to the Home Loan and Mortgage Disclosure Amendment Bill, he believed that financial institutions were racist and refused to approve mortgages to black people in the townships, even when the clients met all the required criteria to qualify for a mortgage. Financial institutions apparently labelled black people as “high risk”.
“Banks are not transformed, they are discriminating against the township. They label townships as high-risk areas so they do not approve bonds. Banks are declining clients who can afford to buy property, who have qualified and [have clean] credit [records], but because they are buying in the township, banks refuse them a bond … You want to transform us, yet, financial institutions are not transformed,” he said.
About 120 estate agency representatives and industry practitioners attended the Cape Town public-participation hearing.
Industry practitioners cast doubt on the bills, saying that, while it sought to regulate the sector and transform the level of participation of the previously disadvantaged arising from the legacy of apartheid, the bills did not fully and clearly demonstrate how it is going to do so.
Mekula said the bills lacked detail.
“They [government] are using the bills to take back the control of the country’s economy. [Neither] bill makes sense ... If the property industry is controlled and still in the hands of white people, then it shows that we are still not free,” said Mekula.
He said that the draft Property Practitioners’ Bill would not help historically disadvantaged property practitioners as it made things complicated.
Gregory Brooks, of Brooks and Michaels Estate Agents, supported Mekula’s submission, saying the bill was not benefiting historically disadvantaged groups.
For example, Brooks said, if the bill was to achieve transformation, it needed to lower qualification criteria for new entrants from the historically disadvantaged groups. Also, some definitions in the bill were too wide.
He admitted that the property sector was not transformed; as such, the discussions around the bill were relevant.
“We need to look at this bill and include aspects of transformation right through the bill,” said Brooks.
Mandisa Sinuke (60), who owns a property estate agency in Philippi township, said the bills’ terms of transformation were broad – it needed to be explained in detail.
“Property ownership is a thorny issue because of its linked to the Group Areas Act. The mortgage bill is even worse because financial institutions are discriminating against black people,” said Sinuke.
Anne Porter of Knight Frank Property, said that black people needed to acquire the necessary skills needed in the sector to enable them to enter the sector and fully participate. “We need to lift the level of skills in order for the industry to be transformed. Nobody wants to entrust their property to anybody to sell who doesn’t have the critical skills,” said Porter.SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox. Read Fin24's top stories trending on Twitter: Fin24’s top stories