Picture: ISTOCK
Picture: ISTOCK

More South Africans are taking up credit for big-ticket items such as houses and vehicles, according to data released by the National Credit Regulator (NCR).

But the improvement, which was recorded in the quarter to December 2017, came off a low base, analysts cautioned.

The fourth quarter usually showed improvement due to spending over the festive season and prices had gone up substantially, NCR analyst Bongani Gwexe said.

In the last quarter of 2017 the value of new mortgages granted increased by R3.79bn — and by R3.99bn compared with the same period the year before. Secured credit, which was dominated by vehicle finance, increased R4.12bn in the quarter and R4.18bn year on year.

"A new vehicle now is more expensive than it used to be, while the average prices of homes have shot up.

"Consumers need to take out much bigger loans because of this," said Gwexe.

The motor industry sold 557,586 new vehicles in the domestic market in 2017, a 1.8% improvement on the 547,547 achieved in 2016.

The National Association of Automobile Manufacturers of SA said the improvement would not have taken place without "unprecedented" manufacturer and dealer sales incentives in the second half of the year.

Gwexe added that the mood around the political outcome of the ANC elective conference in December had also improved consumer confidence.

"We did think credit would be up for the quarter," he said.

As economic growth picks up and confidence improves, steady interest rates and softer inflation should support credit affordability, said Nedbank economist Johannes Khosa.

With a second interest rate cut announced at the March monetary policy committee meeting bringing interest rates down by 50 basis points, credit health was expected to continue to improve.

Neil Roets, CEO of debt counselling firm Debt Rescue, said the interest rate cut would benefit home owners the most.