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Household credit growth slows

Johannesburg - The year-on-year growth in the total value of R1395.5bn in outstanding credit balances within the household sector slowed to 4.1% at the end of July, Absa [JSE:ABSP] said on Friday.

This was compared to the 4.3% seen at the end of June, property analyst Jacques du Toit said in a statement.

Total private-sector mortgage balances, including both commercial and residential mortgages, grew 3.7% year-on-year up to the end of July, compared to 3.4% at the end of June.

This was largely driven by the 6.8% growth year-on-year in commercial mortgages in the first seven months of 2014.

"Growth in the value of R824.3bn in outstanding household mortgage balances remained relatively low at 2.6% year-on-year at end-July," Du Toit said.

"Demand for residential mortgage finance is to a large extent driven by the state of household finances and consumer confidence."

Many households were 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," he said.

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