Research reports on South African residential property sector
Mortgage Advances - 29 February 2012
Mar 09, 2012
29 February 2012 Mortgage advances growth remains low in early 2012
January 2012 saw growth of 6,1% year-on-year (y/y) in the value of outstanding credit balances in the South African household sector, to a level of R1 186,2 billion. On a monthly basis household credit was up by R8,7 billion, or 0,7%, in January from December. The value of outstanding private sector mortgage balances at monetary institutions, which includes both commercial and residential mortgage loans, increased by 2,4% In January (2,5% in December 2011). The value of total mortgage balances outstanding was unchanged in January from December last year. In the household sector the value of outstanding mortgage balances was up by 1,6% y/y in January to an amount of R773,5 billion, which came to a share of 65,2% of total household credit balances. Month-on-month growth of R1,1 billion, or 0,1%, was recorded in household mortgage balances in January compared with December. Real economic growth of 2,8% is expected in 2012 (3,1 % in 2011), consumer price inflation is set to remain above 6% throughout the year, interest rates are to remain stable until late this year, real household disposable income is projected to grow at a slower pace than in 2011, the household debt-to-income ratio is forecast to remain around 75% and many consumers are still struggling with impaired credit records. In view of these expectations the residential property market is forecast to continue to show some subdued growth in 2012, with mortgage advances growth projected to remain well in single digits up the end of the year.
Compiled by: Jacques du Toit Senior Property Analyst Absa Home Loans Absa Group Limited (Reg No 1986/003934/06) 45 Mooi Street Johannesburg 2001 PO Box 7735 Johannesburg 2000 South Africa Tel: +27 (0) 11 350 7246 E-mail: email@example.com Website: http://www.absa.co.za
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