03 Apr 2012
The value of outstanding credit balances in the South African household sector increased by 6.6 percent year-on-year (y/y), according to Absa.
The bank says the increase was R1 197 8 billion in February 2012.
Jacques du Toit, Absa Home Loans senior property analyst, says the month-on-month increase in household credit balances was R11.6 billion or 1 percent in February.
The total amount of outstanding private sector mortgage balances including commercial and residential mortgage loans increased by 2.3 percent y/y to R1 072.2 million in February 2012.
He says this resulted in a monthly rise of R3.6 billion or 0.3 percent in February from January.
Du Toit explains that the value of outstanding mortgage balances, mainly related to residential property was up by 1.6 percent y/y in January to an amount of R777.5 billion, which came to a share of 64.9 percent of total household credit balances.
Absa expects the residential property market to be influenced by the following macroeconomic and household sector related factors:
- Growth in real gross domestic product forecast at 2.7 percent (3.1 percent in 2011), which will impact levels of employment in the economy
- Average consumer price inflation of 6.3 percent (5 percent in 2011) affecting spending power
- Interest rates forecast to remain unchanged until late this year before being hiked on the back of inflationary pressures
- Household finances (income growth, savings, debt and the cost of servicing debt)
- Consumers’ risk profile, inter alia reflected by the number of credit-active consumers having impaired credit records
- The affordability of property and the accessibility of mortgage finance
- Consumer confidence impacted by expectations regarding the economy, household finances and the buying of durable goods by households
Du Toit adds that against these factors, nominal house price growth of around 2 percent is forecast for 2012, with mortgage advances growth projected to remain relatively low.- Denise Mhlanga
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