The average home loan instalment in SA has increased by 38% in one year in rand terms because of rapid interest rate hikes.Despite increasing consumer strain in making home loan repayments, Absa believes it can still write"very good" new business.
The number of applications it receives for car and home loans has fallen considerably this year, but is still around pre-pandemic levels. During Covid-19, banks saw a massive spike in applications for these loans due to record-low interest rates. In 2022, Absa grew gross home loans and advances by 8% and new vehicle loans by 9%.
The bank - which recently signed a vehicle financing partnership with Chinese carmaker BAIC SA - said home loan customers are taking more financial strain than those with car loans.Get 14 days free to read all our investigative and in-depth journalism. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed.