Household credit and mortgage balances growth remaining subdued

Posted On Tuesday, 30 May 2017 11:45 Published by
Rate this item
(1 Vote)

The value of outstanding credit balances in the South African household sector showed growth of 2,9% year-on-year (y/y) to a level of R1 505,5 billion at the end of the first four months of 2017.

Jacques_Du_Toit_Absa_Hoam_Loans

The above-mentioned household credit balances growth was the combined result of continued low growth of less than 2,5% y/y in secured credit balances and growth of below 5% y/y in unsecured credit balances over this period.  

The value of household secured credit balances (R1 152,4 billion and 76,5 % of total household credit balances) increased by 2,3% y/y up to the end of April, unchanged from end-March, but down from 3,6% y/y at end-April last year. The ongoing low year-on-year growth in secured credit balances is driven by the components of household mortgage balances (see below) and instalment sales balances (21,5% of total household secured balances), which contracted by 0,3% y/y in the four months up to end-April.  

Unsecured household credit balances (R353,1 billion and 23,5% of total household credit balances) showed growth of 4,8% y/y at the end of April this year, after a period of year-on-year contraction in the twelve months since April last year as a result of data distortions related to African Bank (see explanatory note in this regard).

The component of general loans and advances balances (58,5% of total household unsecured credit balances and largely consisting of personal loans and micro finance) increased by 5,5% y/y at end-April, after contracting by an average of 7,2% y/y over the 12-month period from April last year up to March this year on the back of the above-mentioned African Bank-related data distortions.  

Growth in the value of outstanding private sector mortgage balances (R1 305,5 billion and 39,3% of total private sector credit balances of R3 324,6 billion), comprising both corporate and household mortgage balances, was recorded at 4,3% y/y at the end of April this year.

Corporate mortgage balances (R403,2 billion and 30,9% of total private sector mortgage balances) showed growth of 7,1% y/y in the four months up to end-April. Outstanding household mortgage balances (R902,3 billion and 78,3% of total household secured credit balances and 69,1% of total private sector mortgage balances) increased by 3,1% y/y up to the end of April. The value of outstanding mortgage balances is the net result of all property transactions related to mortgage loans, including additional capital amounts paid into mortgage accounts and extra monthly payments above normal mortgage repayments.   

The forecast is for growth in household credit balances, as well as growth in household mortgage balances, to remain at relatively low levels in the rest of the year, driven by developments in and the outlook for the economy, household sector finances, consumer confidence and the residential property market.  

 

Last modified on Tuesday, 30 May 2017 11:55

Most Popular

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
 MOA PNP  1
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
 BRONWNY CORBETT
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

4AX listed Heartwood Properties reveals positive financial results

Sep 23, 2019
 JOHN WHALL
Commercial property development company, Heartwood Properties , has revealed a 30%…

Reserve Bank keeps repo rate unchanged

Sep 23, 2019
 LESETJA KGANYAGO
 South African Reserve Bank Governor Lesetja Kganyago on Thursday said this is in line…

Please publish modules in offcanvas position.