ENGLISH ABSTRACT: This study is entitled: "An investigation into the industry attractiveness of the residential mortgage origination industry for entrepreneurs in the Western Cape region of South Africa". The South African mortgage origination industry dates back to 1998 when Mortgage.com approached the banks to originate home loans via the Internet. The USA had seen a rise in the deployment of these websites and predictions where that the platform would outstrip physical channels. This was not to be, but this led to the establishment of Mortgage SA. The mortgage origination industry experienced rapid growth since its inception and was considered to be highly attractive in terms of revenues and opportunity. However, because of the oligopolistic structure of the industry, non-competitiveness of smaller originators ascribed to lower commission rates offered to them by financial institutions and optimal profit levels being reached, it appears that the mortgage origination industry is becoming less attractive than it used to be. The primary objective of the study was to draw conclusions on the fundamental industry attractiveness of the mortgage origination industry for entrepreneurs in the Western Cape region of South Africa. Secondary objectives included; determining whether the mortgage origination industry is still a viable or profitable industry for entrepreneurs to explore, examining the current state of the mortgage origination industry, investigating the key issues and problems facing the mortgage origination industry and establish the entry and exit barriers as well as the feasibility of the industry for new entrants. This study was a culmination of literature from various sources, researching theories, views and perceptions regarding mortgage origination in South Africa. Various websites, newspaper articles, journals and books were used as part of the research process to deepen the researcher's understanding of the mortgage origination industry, its roles and functions. Secondary research was conducted in the form of a literature review which provided a better understanding of the mortgage origination industry, provided an introduction to industry attractiveness and provided a basis for the primary research. Primary research was conducted by means of personal one-to-one interviews with key decision makers from a predominantly external (client) as well as an internal (mortgage originator) perspective. To avoid bias and ensure an overall perspective of the industry, it was important that the sample be reflective of role players involved in the mortgage origination process, including home buyers (investors), estate agents, mortgage originators, lawyers and lenders (banks). The methodology employed for the purpose of the study was qualitative. The interviews were conducted by means of using a discussion guide and were based on the respondent's personal experience with the industry as a whole. To answer the research question as set out in the research problem as well as fulfil the objectives of this study, it was essential that the selected sample be representative of stakeholders in the mortgage origination industry, and a purposive or judgemental sample was selected using non-probability sampling. Overall, the mortgage industry is not as attractive as it used to be, yet it cannot be deemed to be completely unattractive either. On an average the industry is attractive. The research hypothesis can, therefore, neither be accepted nor rejected with confidence. Considering the current economic climate and market conditions, one would be tempted to reject the research hypothesis, but a positive economic turn would cause the industry to become attractive again. Finally, it is recommended a more detailed analysis of the industry be conducted. The methodology employed for the purpose of this study was qualitative, as exhaustive quantitative research was not required. Furthermore, it is recommended that a quantitative approach be utilised to verify the results of the study. Furthermore, it is also recommended that the mortgage origination industry be analysed in terms of its fundamental attractiveness every one to three years, as strategies need to be re-examined as events unfold. An accurate diagnosis of the industry is necessary for deciding on a sound long-term direction, setting appropriate objectives and crafting winning strategies.
