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: jacques@absa.co.za Website: http://www.absa.co.za
The information in this publication is derived from sources which are regarded as accurate and reliable, is of a general nature only, does not constitute advice and may not be applicable to all circumstances. Detailed advice should be obtained in individual cases. No responsibility for any error, omission or loss sustained by any person acting or refraining from acting as a result of this publication is accepted by Absa Group Limited and/or the authors of the material.
Mortgage Advances, Inflation and Interest Rates
Period Total mortgage advances1 R billion y/y % ch 1 043.9 3.8 1 047.6 3.4 1 046.0 2.9 1 048.2 3.0 1 053.5 3.1 1 057.3 3.3 1 058.4 2.9 1 059.7 1.9 1 064.5 2.2 1 065.2 2.1 1 067.0 1.9 1 068.6 2.5 1 068.6 2.4 Mortgage advances to households, end of period R billion y/y % ch % of total 761.4 4.6 72.9 764.2 4.1 73.0 765.3 3.8 73.2 763.7 3.3 72.9 765.5 3.2 72.7 766.4 3.1 72.5 767.2 2.7 72.5 767.3 1.4 72.4 768.6 1.2 72.2 769.4 1.1 72.2 771.4 1.0 72.3 772.4 1.8 72.3 773.5 1.6 72.4 CPI inflation % 3.7 3.7 4.1 4.2 4.6 5.0 5.3 5.3 5.7 6.0 6.1 6.1 6.3 Mortgage rate %, eop 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0
Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012
1
Comprising commercial and residential mortgages (end of period (eop)) Sources: SARB, Stats SA
1
Household Credit and Interest Rates
9 8 7 16 15 14 13 12 % 5 4 3 2 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 11 10 9 8 Jan-12
%
6
Household credit growth (left) Source: SARB
Prime rate (right)
Household Mortgage Advances and Interest Rates
10 9 8 7 6 16 15 14 13 12 % 11 10 9 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 8 Jan-12
% 5
4 3 2 1 0 Jan-09
Household mortgage advances growth (left) Source: SARB
Mortgage rate (right)
Total Mortgage Advances Growth and Interest Rates
35 30 25 20 18 17 16 15 14 13 % 12 11 10 9 8 02 03 04 05 06 07 08 09 10 11 12
Total mortgage advances (left) Source: SARB Mortgage rate (right)
%
15 10 5 0
2
