Is the number of South Africans living in their own homes declining?

The general household survey conducted by Statistics South Africa which was released this month shows that the number of South Africans living in their own homes which they have fully paid for has declined from a peak of 61.4 percent in 2008 to 54.9 percent last year.

The figures do not show whether people are losing their homes or whether there has been an increase in the number of households with most not owning their homes.

The survey says in 2002, only 52.9 percent of South African lived in their own fully-paid homes. This figure increased peaking at 61.4 percent in 2008 but declined to 53.5 percent in 2011 before increasing again to 54.5 percent in 2012 and 54.9 percent last year.

The survey showed that there were 15.1 million households in South Africa last year and 8.3 million owned homes that were fully paid for. Some 3.2 million were renting, while 1.9 million were living in rent free homes. Another 1.4 million owned their homes but were still paying for them.

While the majority of South African households are living in homes that have been fully paid for, figures from the National Credit Regulator show that there are 20.64 million credit-active consumers and just over half are in good standing.

The latest figures are for December last year and they show that only 10.71 million consumers were in good standing. A staggering 9.93 million had impaired records with 2.6 million having judgments and administration orders pending.

SA consumers to be hard pressed

South African consumers are likely to continue experiencing financial strain in the wake of a poorly performing economy, low employment and real income growth, one of the country’s leading banks ABSA says in its latest Housing Price Indices report.

The economy contracted by 0.6 percent in the first quarter. Barclays, the parent company of ABSA,  says growth for this year will only be 1.4 percent. The Reserve Bank says it will be 2 percent.

For those who can raise the cash, this is the ideal time to buy property because the housing market has been stable with average price growth of between 8 and 9 percent during the past nine months.

But upward pressure on inflation and an expected further hike in interest rates will affect consumers’ spending power and impact credit accessibility, affordability and demand.

Average prices for homes in May were:

• Small homes (80m²-140m²): R837 200
• Medium-sized homes (141m²-220 m²): R1 146 800
• Large homes (221m²-400m²): R1 780 200

 Consumer price inflation averaged 6% year-on-year in the first four months of the year, and is forecast to remain above this level for the rest of the year.

Interest rates are expected to be hiked by another 50 basis points in September, which will bring prime lending and variable mortgage interest rates to a level of 9.5% per annum by year-end.

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