Year-on-year growth in the total value of R1 394,5 billion in outstanding credit balances in the South African household sector slowed down further to 4,1% at the end of July 2014 from 4,3% at end-June. Total private sector mortgage balances, which include both commercial and residential mortgage loans, showed growth of 3,7% y/y up to the end of July this year (3,4% y/y at end-June), largely driven growth of 6,8% y/y in commercial mortgage in the first seven months of the year. Growth in the value of R824,3 billion in outstanding household mortgage balances remained relatively low at 2,6% y/y at end-July.
Demand for residential mortgage finance is to a large extent driven by the state of household finances and consumer confidence. Many households are experiencing financial strain, while consumer confidence remained low in the first half of the year. In view of these developments, growth in household credit, including mortgage advances, is expected to remain subdued up to the end of the year and in 2015.