03 Apr 2013
The value of outstanding credit balances in the South African household sector showed growth of 9.8 percent year-on-year (y/y) to R1.311 trillion up to the end of February 2013 (9. 9 percent y/y in January).
According to Absa Home Loans, the components of instalment sales and unsecured credit (comprising personal loans, micro finance, credit card debt and overdrafts) continued to record relatively strong growth of 19.6 percent y/y and 27.4 percent y/y respectively in February.
The growth in outstanding household mortgage balances, however, remained low in February.
Jacques du Toit, Absa property analyst, explains that outstanding private sector mortgage balances, which include both commercial and residential mortgage loans, increased by only 1.6 percent y/y in February, impacted by a further contraction of 1.4 percent y/y in commercial mortgage balances.
“The value of outstanding household mortgage balances was again marginally lower at 2.8 percent y/y in February from January.”
Du Toit says the continued strong growth in instalment sales and unsecured credit balances caused the share of these components in total household credit to rise further, whereas the share of household mortgage balances dropped to 60.6 percent in February, resulting from growth in this component of household credit remaining subdued.
“Year-on-year growth in mortgage balances is forecast to remain in single digits in 2013 in view of trends in and prospects for the economy, household finances, consumer confidence and the property market.”
Du Toit adds that with real economic growth projected to be marginally higher at 2.7 percent this year from 2.5 percent in 2012, interest rates are forecast to remain stable at current levels throughout the year, taking account of the likely impact of macroeconomic developments on the household sector. – Denise Mhlanga
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