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December 2015
Housing
C
redit-risk profiles will most
probably stay under pres-
sure and are to remain a key
factor in the accessibility of and the
demand for and growth in household
credit. According to AbsaHome Loans
Property Analyst, Jacques du Toit,
“In view of a persistent severe lack
of sufficient savings, access to credit,
together with consumer confidence
will to a large extent drive household
consumption expenditure, and even-
tually economic growth.”
He explains that in the first three
quarters of 2015 year-on-year house
price growth was lower in some seg-
ments of themarket, while remaining
relatively stable or rising in other seg-
ments. The gradual slowing trend in
middle-segment house price growth
continued in the third quarter of the
year. Declining real price growth came
on the back of inflationary pressures
up to the third quarter. Price growth
in the affordable segment remained
relatively strong, with the luxury
segment showing a significant down-
ward trend in price growth since a
recent peak in late 2014.
House price growth is forecast to
remain in the single digits for the
rest of the year and in 2016. Lower
price growth is forecast for 2015 and
2016 comparedwith the previous two
years, mainly as a result of trends in
and the outlook for key macroeco-
nomic and household sector-related
factors. In view of expectations for
nominal house price growth and
consumer price inflation, low real
price inflation is projected for this
year, with prices to remain virtually
flat in real terms in 2016.
Factors such as the National Credit
Act (NCA), banks’ risk appetites and
lending criteria, consumers’ credit-
risk profiles and consumer confi-
dence largely affected the availability
and accessibility of and demand for
credit by households.
The ratio of household debt to
disposable income eased to 77,8%
in the second quarter of the year
from 78,7% in the first quarter, with
household debt rising by 1,2% q/q
and nominal household disposable
income increasing by 2,4% q/q in
the second quarter. The debt ratio is
calculated as the total amount
of outstanding household debt ex-
pressed as a percentage of the total
annual disposable income of house-
holds, i.e. after deductions for tax,
social contributions and transfers.
Consumer credit-risk profiles in
the second quarter of 2015:
•
A total of 10,53millioncredit-active
consumers, or 45,1% of a total of
23,37 million, had impaired credit
records, up from 10,41 million
(45%) in the first quarter. In mid-
2007 a total of 36,4% credit-active
consumers had impaired credit
records.
•
A total number of 12,84 million
(54,9%) credit-active consumers
were in good standing, up from
12,7million (55%) in the first quar-
ter. Asmuch as 63,6%credit active
consumers were in good standing
in mid-2007.
•
A total number of 82,17 million
consumer credit accountswere ac-
tive, of which 60,47million (73,6%)
were in good standing and 21,71
million (26,4%) were impaired.
Consumers’ credit-risk profiles are
The Housing Report
The
household
sector faced
increased financial
strain during most
of 2015. Household
finances will continue
to be driven by factors
such as economic growth,
employment, income and
consumption growth, debt levels,
inflation and interest rates.