Low growth in household credit and mortgage balances

Posted On Monday, 15 July 2013 00:56 Published by Commercial Property News
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May 2013 saw year-on-year (y/y) growth in outstanding credit balances in the South African private sector (households and the corporate sector) remaining unchanged at 9,1% from end-April.

The value of private sector credit balances came to R2 486,7 billion at end-May.

Household CreditBalance May2013Growth in outstanding credit balances in the household sector, which include instalment sales, leasing finance, mortgage loans, overdrafts, credit card debt, and general loans and advances (mainly personal loans and micro finance) came to 9,4% y/y at the end of May compared with 9,5% y/y at the end of April.


Growth in the component of household unsecured credit (comprising general loans and advances, credit card debt and overdrafts), slowed down to 24,5% y/y up to the end of May from 25,4% y/y at end-April.

Outstanding private sector mortgage balances, which include both commercial and residential mortgage loans, saw growth of only 1,8% y/y in May. This continued low growth was affected by a further contraction of 1,2% y/y and 0,2% month-on-month in commercial mortgage balances up to end-May, whereas growth in household mortgage balances was marginally higher during this period. Growth in the value of outstanding household
mortgage balances was recorded at 2,9% y/y at the end of May from 2,7% y/y at end-April.

The share of household mortgage balances in total household credit balances was unchanged at 60,3% in May from April.

Mortgage Balances May 2013Growth in outstanding household credit balances, including household mortgage balances, is forecast to remain at a relatively low level towards the end of the year, based on conditions in and prospects for the economy, the residential property market, household finances and consumer confidence.

Expected lower growth in vehicle sales this year compared with last year is forecast to cause growth in instalment sales balances to slow down towards the end of 2013.

Growth in household unsecured credit balances is on a declining trend since late last year, and if sustained, this development will have a subdued effect on growth in total household credit balances in the rest of the year

 

Last modified on Monday, 15 July 2013 01:17

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