This was the result of growth in secured credit balances slowing down, whereas unsecured credit balances contracted compared with 2015.  

Growth in the value of household secured credit balances (R1 139,6 billion and 76,7% of total household credit balances) dropped to 2,3% year-on-year (y/y) at the end of December last year compared with growth of 3,8% y/y at end-December 2015. The slowdown in growth in secured balances in 2016 came on the back of lower growth in household mortgage balances (see below), whereas instalment sales balances (21,5% of household secured balances), largely related to vehicle finance, contracted by 0,8% last year from 2015. The contraction in instalment sales balances commenced around mid-2016 and is in line with a downward trend in new vehicle sales volumes, which dropped by 11,4% in 2016.   

Household unsecured credit balances (R346,1 billion and 23,3% of total household credit balances) contracted by 4,2% y/y at end-December 2016 compared with growth of 6,7% y/y at end-2015. The contraction in general loans and advances balances is mainly the result of data distortions during last year (see the explanatory note in this regard), with the component of general loans and advances (largely personal loans and micro finance) the main factor behind this contraction. However, outstanding credit card balances also contracted in 2016, by 1,2 %, which contributed to the contraction in overall household unsecured credit balances last year.  

The value of outstanding household mortgage balances increased by 3,2% to R891,7 billion in the 12-month period up to end-December last year, compared with growth of 4,4% y/y at the end of 2015. The lower mortgage balances growth in 2016 was related to the state of household finances and a declining trend in consumer confidence during the year. 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 the South African economy forecast to grow by only 1% in 2017, projected stable interest rates, expected higher personal taxes, consumer price inflation to average between 5,5% and 6%, household finances and consumer confidence will remain under pressure. In view of these expectations, growth in household credit balances, including mortgage balances, is forecast to remain relatively low in 2017.