The Momentum UNISA Household Wealth Report Q4 2013
03 June 2014 | Company News & Results | Momentum | Momentum and UNISA
On average, South African households’ net wealth increased 10.1% in 2013.
New estimates of Momentum/Unisa show that the value of South African households’ net wealth increased by 10.1% (R644 billion) during 2013 to R7 044 billion at the end of the fourth quarter (Q4) of 2013.
The double digit percentage increase in households’ net wealth can be ascribed to a combination of two factors: firstly, the value of household assets increasing at a higher rate than liabilities and, secondly, household assets being 5.44 times more than household liabilities.
Momentum/Unisa estimated the value of household assets to have increased by 9.9% in Q4 2013 (compared to Q4 2012) to R8 629 billion, while their liabilities increased by 9.4% to R1 585 billion.
The increase in the value of household assets was driven by financial assets, which were 11.6% higher in Q4 2013 compared to a year before. Financial assets were spearheaded by the value of households’ interest in retirement funds and long-term insurers, which increased by 11.8% over the year up to Q4 2013.
The driving force behind the increase in household liabilities was the "other debt” category. Other debt includes outstanding unsecured loans, which, according to the National Credit Regulator, were 7.2% higher at the end of Q4 2013 (compared to the preceding year). It also includes secured credit such as instalment sales. Outstanding secured credit was 12.7% higher at the end of 2013.
The increase in households’ net wealth also outpaced the increase in their disposable income. Consequently the ratio of household net wealth to disposable income increased from 323% at the end of Q4 2012 to 333% at the end of Q4 2013.
Despite the better performance of household net wealth, South African households, on average, remain much poorer than households in, for instance, developed economies. Whereas the ratio of household net wealth to disposable income in South Africa averaged 333% in 2013, the same ratio was 739% in Japan, 688% in Europe and 603% in the United States of America.
South African household net wealth increased faster than consumption price inflation. Expressed in 2005 prices, the value of real household net wealth was 5.7% higher in Q4 2013 compared to Q4 2012.
Apart from outpacing inflation, household net wealth increased faster than the combined increase in prices and in the number of households. At R281 427, real net wealth per household was 2% higher in Q4 2013 compared to Q4 2012.
