Credit providers are being forced to overhaul their entire processes in order to conform to the new legislation. Whilst some companies and banking institutions are used the period leading up to 1 June to increase their customer base before the legislation kicks in, there are others, like the property industry, who are expecting a boom in investor activity in the property market and certainly do not look at the NCA as a barrier to doing business.“Bond applications are going to be both more thoroughly vetted and possibly harder to come by with the introduction of the new act. This will, however, have a positive effect on certain segments of the property market, by increasing the demand for rental property and thereby increasing the investment potential for existing and new landlords”. Says Danie Kotze, Head of Marketing at Realcor Cape.Kotze continues, “We believe that with the introduction of this act, a very obvious effect is going to be a drop in successful bond applications. First-time buyers are going to more readily move into rental properties and possibly leave the purchasing option until they are more financially secure. This of course opens up the rental market and investors are very quickly realising the potential”.The ease with which credit has, up till now, been granted, is one of the major causal factors of household debt and has been attributed to the majority of court judgements and sequestrations that have been on the increase for the last 10 years or so.“Risk premiums across the market should decrease as people get used to lower levels of debt defaulting, putting downward pressure on prices. We strongly believe that the NCA will be beneficial for both creditors and consumers. As a company, Realcor Cape prides itself as a modern, forward thinking, progressive company, in all aspects of its business”, says Kotze.It would appear that with much less job security in today’s South Africa, people need to be prepared to move, often at short notice. The rental option has always availed itself to this transient population and with the introduction of this new Act, it would appear, even more so.Whilst current credit and bond consumers will not be directly affected by the new legislation, increases in credit availability will be curtailed somewhat as ability to repay debt has to be more closely monitored. This could also affect the way in which second and third bonds are granted.On the minus side however, credit will become even harder to get for those on low incomes and inadvertently perhaps will increase the divide even more between the haves and the have-nots. For many, buying essential appliances and furniture on credit will no longer be an option. Cash and laybys will often be the only way that many will have to purchase the things they need.Contact DetailsDanie KotzeRealcor Cape082 444 6772daniek@realcorcape.co.zawww.realcorcape.co.za