Standard Bank`s median house price eases 0.4% y/y

Standard Bank`s median house price eases 0.4% y/y

Manufacturing production growth surprises on the upside.

House price growth has by and large reached a plateau in recent months according to Sibusiso Gumbi, research analyst at Standard Bank. Standard Bank's (smoothed) median house price (using the assessed values of those houses for which mortgage finance was approved by Standard Bank) contracted by 0.4% year on year (y/y) in December from a contraction rate of 1.0% y/y in November.

Manufacturing production growth surprised on the upside, buoyed by a weaker rand, rebounding to 2.6% y/y in November from growth of 1.2% y/y in October. A sustained improvement, however, remained under threat, given the ongoing churning of global economic waters (particularly in the eurozone, SA's key trading partner).

Total credit extension to households crept up to 5.4% y/y in November from 5.3% y/y in October. Conversely, growth in mortgage advances had continued to ease, registering 1.9% y/y growth in November from growth of 2.1% y/y in October.

Households' sizeable existing debt burden might serve to weigh down on further credit uptake.

Gumbi said that data released by the National Credit Regulator (NCR) encouragingly pointed to a slight improvement in overall consumer creditworthiness in Q3:11 (the latest period available). Of the 19.1 million credit-active consumers tracked by the NCR, 53.8% were classified as being in good standing in Q3:11, from 53.3% in the previous quarter.

High-frequency data corroborated the trend, with the number of civil summons issued and judgements recorded for debt for private individuals having continued their descent in October (recording y/y declines of 16.1% and 22.4% respectively). The number of insolvencies too suggested improving consumer creditworthiness, having registered a 17.0% y/y fall in October.

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