The low growth in household credit balances is related to data distortions in respect of unsecured credit balances (see the explanatory note) as well as declining growth in secured credit balances.  

The value of outstanding household secured credit balances (R1 136 billion and 76,8% of total household credit balances at the end of October) increased by 2,5% y/y in the 10-month period, after peaking at 4,1% y/y at the end of February this year.

The downward trend in secured balances since early this year was the combined result of declining growth in household mortgage balances (see below) and instalment sales balances contracting by 0,7% y/y up to the end of October. Instalment sales balances are mainly related to the financing of vehicles, with new vehicle sales volumes declining by about 11% y/y in the period January to October.  

Household unsecured credit balances (R342,6 billion and 23,2% of total household credit balances) dropped by 3,6% y/y up to the end of October. General loans and advances balances (58,7% of household unsecured credit balances and mainly consisting of personal loans and micro finance) contracted by 7% y/y in the 10-month period. The year-on-year contraction in general loans and advances balances is mainly the result of data distortions (see the explanatory note in this regard).     

Total private sector mortgage balances (R1 284,7 billion and 39,9% of total private sector credit balances of R3 219,7 billion at end-October) recorded growth of 5,4% y/y in the ten months up to the end of October. This was the net result of growth of 10,2% y/y in corporate mortgage balances (30,7% of total private sector mortgage balances) and a downward trend in growth in household mortgage balances (69,3% of total private sector mortgage balances) in the 10-month period.   

Growth in outstanding household mortgage balances slowed down to 3,4% y/y in the ten months to October this year. These credit balances, with a value of R889,8 billion, had a share of 69,3% in total private sector mortgage balances, 60,2% in total household credit balances and 27,6% in total private sector credit balances at end-October. 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 trends in and the outlook for the economy, household finances and  consumer confidence, growth in household credit balances is expected to remain at a subdued level up to year-end and in 2017.