Despite concerns of not being able to meet financial obligations, there is some optimism among SA consumers. Picture: Steve PB/Pixabay
Although South African consumers are becoming concerned about the rising cost of housing, there is some optimism about household finances and the repayment of debt.
This is according to a Consumer Pulse Study for Q3 2024 by TransUnion.
The TransUnion study showed that 64% of consumers are confident about their ability to meet their debt obligations.
However, 36% of consumers do not expect that they will be able to pay at least one of their current bills and loans in full. This is a small improvement from 37% in 2024Q2 and 38% year-on-year.
Of the consumers that said that they are be unable to pay at least one of their current bills and loans in full, 38% intend to pay an amount that they could afford, but not the whole balance.
Other consumers said they would pay their current bills and loans by borrowing from a friend or family member (24%), while 9% of them admitted that they did not know how they would pay their bills or loans.
Fatgie Adams, head of Credit Risk Solutions, TransUnion Africa said: "Our findings show that while some consumers are seeing income growth, the struggle to meet monthly obligations is still very real for more than a third (36%) of the respondents.“
"This indicates that economic recovery is uneven and that many households are still operating under significant financial stress."
Seventy six percent of consumers expect their incomes to rise over the next year, up from 70% in the same quarter last year, while 73% of consumers are optimistic about their household finances for the next 12 months.
While there has been optimism, SA households also have financial concerns over the next six months.
The study showed that 38% of households find inflation for everyday goods as a major concern, while 20% cite jobs as a significant issue.
Housing prices also remain a concern for 12% of consumers, a three-percentage-point increase from the previous quarter.
This highlights the complexities of the local economic market, particularly around access to affordable housing and mortgages while still having the financial capacity to service debt.
"While the easing of inflationary pressures and potential interest rate cuts provide a glimmer of hope, the rising cost of housing remains a significant concern for many South Africans,” Adams said.
Adams said that despite an improvement in household income expectations, the affordability of housing continues to be a critical issue that requires attention.
TransUnion has revealed that 52% of consumers have reduced discretionary spending like dining out, travel, and entertainment in the past three months. Plus, 28% of consumers reported cancelling subscriptions or memberships in that time period.
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