South Africans are increasingly less able to repay their debts, such as home and car loans.
The number of consumers unable to repay their home loans is increasing rapidly in the current high interest rate environment. They also battled to pay other debts during the second quarter of the year. Credit extension has also slowed down and when households cannot borrow more, they cannot consume more, decreasing overall household demand.
According to the South African Reserve Bank’s latest report on credit extension, growth in credit extended to households came in at 6.1% in July compared to a year ago, 0.4 percentage points lower than in June. “This situation is particularly prevalent for the top 5% of South Africans who have 75% of all home loans by value. Within the Eighty20 National Segmentation, this wealthier heavy hitters segment have a CRND for home loans at 61%, vehicle asset finance at 25%, with credit card debt up to 23%,” says Andrew Fulton, director at Eighty20.
Eighty20’s analysis highlighted a significant difference in the credit environment in the provinces. The latest StatsSA Labour Force Survey revealed the official unemployment rate in the Western Cape is 20.9%, significantly lower than Gauteng at 34.4% and the country at 32.6%. In addition, job growth in the Western Cape had year-on-year growth of 15.7%, compared to 4.2% for Gauteng, the same as the figure for the country.
Eighty20’s segmentation from the fourth quarter of 2020 to the fourth quarter of 2022 showed a large increase in heavy hitter home loans per quarter during the lowest interest rate environment South Africa has seen in decades.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
From meal plans to health advice – this is how South Africans are using AI and ChatGPTSouth African are using the AI-driven ChatGPT to improve their personal and work lives.
Read more »
South Africans returning to the office must overcome ‘flabby work brain’When employees return to the office, they wonder if things could be better at home.
Read more »
'More grace and blessings': South Africans celebrate Nic Kolisi’s special daySiya and Rachel Kolisi's firsborn son, Nic, recently celebrated his ninth birthday in Disneyland, Paris. His parents wished him a happy birthday on Instagram.
Read more »
Report Reveals How South Africans Are Using AI And ChatGPTOne of the key concerns raised however is that humans will begin to rely on AI too much, which will impact our species already concerning levels of human intelligence and creativity.
Read more »