Monday, 30 October 2017 21:31

The value of outstanding credit balances in the South African household sector continued to show relatively low growth in the first nine months of 2017

Written by
Rate this item
(0 votes)

The value of outstanding credit balances in the South African household sector continued to show relatively low growth in the first nine months of 2017, rising by 3,3% year-on-year (y/y) to a level of R1 522,6 billion.

Jacques_Du_Toit_Absa_Hoam_Loans

Household secured credit balances (R1 170,2 billion and 76,9 % of total credit balances) increased by 3,3 % y/y in the 9-month period up to the end of September this year. This year-on-year growth in secured credit balances was the result of trends in household mortgage balances (see below), with growth in instalment sales balances (21,7% of total household secured balances and mainly related to vehicle finance) recorded at 4,4% y/y up to end-September.

Unsecured credit balances in the household sector (R352,3 billion and 23,1% of total credit balances) increased by 3,5% y/y in the period January to September this year. General loans and advances balances (58,5% of total unsecured credit balances and largely related to personal loans and micro finance) showed growth of 3,4% y/y up to the end of September.

The value of outstanding private sector mortgage balances (R1 334,3 billion and 39,2% of total private sector credit balances of R3 402,7 billion), which includes both corporate and household mortgage balances, increased by 4,4% y/y in the first nine months of the year. Corporate mortgage balances (R420,1 billion and 31,5% of total private sector mortgage balances) increased 7,5% y/y in the period January to September.

Growth in outstanding household mortgage balances (R914,2 billion, with a share of 78,1% in total household secured credit balances and 68,5% in total private sector mortgage balances) remained in line with that since the start of the year, coming in at 3% y/y up to end-September. 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.

Against the background of expected low economic growth of only 0,6% this year, the headline consumer price inflation rate forecast to average 5,2% for the full year, interest rates to remain unchanged, a low level of consumer confidence, the general state of household finances, trends in consumer credit risk profiles and banks’ risk appetites and lending criteria, growth in household credit balances, including mortgage balances, is forecast to remain around current levels up to the end of the year. 

Last modified on Monday, 30 October 2017 21:39

Most Popular

Women Property Network announces winners in 2017 SA women in Property Awards

Oct 19, 2017
WPN2017 Awards
At a glittering event held at the Polo Room, Inanda Club last night, the Women’s Property…

Increase productivity at work: just add air, sunlight, and water

Oct 23, 2017
Nigel Oseland
Only 53% of wage earners think their place of work helps their productivity.

Emira Property Fund's R200m Rosebank office-to-residential conversion meets a high-demand gap in the market

Oct 26, 2017
Emira The Bolton residential development perspective
Emira Property Fund’s value-enhancing conversion of its Rosebank office property assets…

Sky City Mall: The hub of the mega Sky City development

Nov 03, 2017
Sky City Mall Front view
GMI Property Group (GMI), in collaboration with Cosmopolitan Projects are pleased to…

The ageing groups of home owners remain a force to be reckoned with in tougher economic times

Oct 19, 2017
John LoosFNB
The 3rd Quarter 2017 FNB Estate Agent Survey continued to point strength in levels of…