Here’s how much money the average South African currently owes for his car and house

New data from consumer credit reporting agency TransUnion shows South Africa’s finances remain under pressure amid record unemployment and rising inflation.

Arrangements, a measure of new accounts opened that is a function of both demand and supply of credit, increased year over year (year-over-year) across all major loan categories, at except credit cards.

Home loans saw the largest percentage increase in originations in the latest data, up 149.6% year-over-year in the second quarter of 2021.

“This is as much a function of comparison with a weak quarter in 2020 as it is a reflection of increased activity in the market,” said TransUnion.

“Over the past few quarters, there has been a trend of consumers whose incomes have not been affected or even increased during pandemic times entering the housing market as affordability has increased; this trend continued during the current quarter.

While the auto market is also experiencing a recovery, especially for new used models, auto finance also saw strong start-up growth, up 95.8% year-over-year, the group said.

Vehicle loans

TransUnion data shows the average car loan outstanding balance in South Africa is 222,804 R.

In the second quarter of 2021, the volume of new vehicle loans increased by 95.8% year-on-year. This is expected because during the comparable period in 2020, Level 5 and 4 foreclosure restrictions prevented dealers from operating, TransUnion said. He noted that the current origination volume remains below pre-pandemic levels – down 9% from the second quarter of 2019.

“However, the gap is narrowing; a sign of recovery with the return of demand. New loan amounts increased 8.7% year-on-year as consumers pay more for vehicles due to continued price increases. Account-level serious delinquency rates declined slightly to 7.1% in the third quarter of 2021 from the previous year and across all age groups. “

Stability of defaults may result from refinanced arrangements contributing to higher average balances per account, but lower repayment values ​​for consumers reaping the benefits of a low interest rate and an improvement. of the risk mix of the new fixtures, TransUnion said.

Mortgage loans

TransUnion data shows the average mortgage loan balance in South Africa is R593,599. The volume of home loans has rebounded since the start of the pandemic – up 149.6% year-on-year, the group said.

“The comparative growth is exceptionally high as the deeds office was closed in the second quarter of 2020, creating a backlog of requests that resulted in below-average approvals.

“However, with many industries taking a hybrid approach to working, the demand for larger living spaces has increased. Millennials dominate origins from a distribution perspective, accounting for 52%, followed by Gen X at 41%. “

One factor that may have contributed is an increased appetite by mortgage lenders towards borrowers with a low risk profile, TransUnion said.

“The number of origins to blue chip borrowers and above in the second quarter of 2021 (78%) is up 15% year-on-year (63% in the second quarter of 2020). Another factor is the increase in refinanced properties, resulting in lower repayment amounts, which reduces the financial pressure on consumers. “

Read: Areas of South Africa where people depend more on grants than wages

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