Growth in household credit and mortgage balances slows down further

Growth in the total value of outstanding credit balances in the South African household sector came in lower at 3,6% year-on-year (y/y) at the end of October 2014 from 3,8% y/y at end-September. Growth in both household secured and unsecured credit balances was marginally lower at end-October, driven by a slower pace of growth in the largest components of secured and unsecured credit balances, i.e. mortgages and general loans and advances.

Trends in household credit and its components will continue to be driven by economic developments and the resultant impact on household finances and consumer confidence. The household sector is expected to continue to experience some financial pressure over the next twelve months as interest rates are forecast to rise further during the course of 2015. As a result, growth in household credit, including mortgage advances, is forecast to remain largely subdued in the remainder of the year-end and in 2015. Read more – ABSA – Credit and mortgage advances (Oct 2014)