Continued stable growth in household credit and mortgage balances

Posted On Friday, 31 May 2019 12:20 Published by
Rate this item
(1 Vote)

Growth in the value of outstanding credit balances in the South African household sector (R1 660,9 billion) remained relatively stable in the first four months of 2019, recorded at 6% year-on-year (y/y) at the end of April this year.

Jacques_Du_Toit_Absa_Home_Loans

Household secured credit balances (R1 255,5 billion and 75,6% of total household credit balances), which includes mortgage, leasing and instalment sales balances, showed growth of 5% y/y in the 4-month period up to end-April (4,9% y/y at end-March). Mortgage balances growth was only marginally lower at end-April (see below), whereas growth in instalment sales balances (R284,1 billion and 22,6% of total household secured credit balances) improved to 8,3% y/y from 7,5% y/y at end-March.

Growth in household unsecured credit balances (R405,5 billion and 24,4% of total household credit balances) was recorded at 9,4% y/y at end-April. General loans and advances growth came to 9,7% y/y at the end of April, with credit card balances also rising by 9,7% y/y and overdraft balances increasing by 7,3% y/y.

The value of outstanding private sector mortgage balances (R1 431,2 billion and 38% of total private sector credit balances of R3 771 billion), which include both corporate and household mortgage balances, increased by an unchanged 4,6% y/y up to end-April. Growth in the value of outstanding household mortgage balances (R969,7 billion and 77,2% of total household secured credit balances and 67,8% of total private sector mortgage balances) came to 4% y/y at end-April, which was slightly down from 4,1% y/y at end-March. 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.

Trends in household credit balances, including mortgage balances, will continue to be driven by developments in and prospects for the economy, household sector finances, consumer confidence and banks’ risk appetites and lending criteria. Growth in household credit balances is forecast at 5,5% for the full year, with growth in household mortgage balances projected at 4,5% y/y by the end of the year. Interest rates are forecast to be cut by 25 basis points at the next Monetary Policy Committee meeting in July, which will be supportive of the residential property market regarding market activity, transaction volumes, property price growth and the demand for and growth in mortgage finance.

Last modified on Friday, 31 May 2019 12:29

Most Popular

Balwin Properties announces R9 billion Munyaka Crystal Lagoon development in Waterfall, Midrand

Feb 06, 2020
Munyaka Crystal Lagoon
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Nedbank’s facilitation of the Barloworld-Khula Sizwe transaction highlights the bank’s commitment to transformation in the commercial property sector

Jan 24, 2020
Nedbank Barloworld Khula Sizwe
Nedbank’s facilitation of the Barloworld-Khula Sizwe transaction highlights the bank’s…

Atterbury develops new Cape Town showroom for WeBuyCars

Jan 30, 2020
Atterbury We Buy Cars exterior view
Leading property developer and investor Atterbury has handed over the innovative…

New fire safety global standard being developed for buildings and infrastructure

Jan 30, 2020
TC Chetty RICS SA Country Manager
The Royal Institution of Chartered Surveyors (RICS) is collaborating with a coalition of…

382 Jan Smuts avenue gets caffein boost

Jan 28, 2020
Seattle
382 Jan Smuts, which is situated in the heart of Craighall, one of the busiest and most…

Please publish modules in offcanvas position.