Consumer pressure hits property market

12 July 2018

Landlords, tenants and homeowners have not been left unscathed in the wake of petrol price increases, a stagnant economy and impending municipal rate hikes.

While consumers are nowhere near defaulting on debt, including mortgages, as they did in 2009, things are getting tougher, say analysts.

The petrol price increase this week has added to the woes of South Africans, some of whom no longer receive a 13th cheque or annual salary increase, but face a rising cost of living.

Rudi Botha, chief executive of bond originator BetterBond, says a growing percentage of the average consumers' monthly take-home pay is now being used to repay "bad debt" rather than "good debt", such as a home loan.

This has been indicated in the latest Reserve Bank statistics that show year-on-year growth of 5.3% at the end of May in unsecured credit extension in the household sector, compared to 3.1% at the end of December.

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