South Africa’s household debt crisis: Shocking scale revealed

Does your family budget feel tight?

You are not alone.

New data shows the average South Australian household currently has more than $215,000 in debt.

Data Finance Analytics (DFA) – which compiles its data through ongoing, ongoing household surveys that monitor financial, property, and economic trends to gather information about housing, renting and investor stress – has revealed financial difficulties in the community.

According to the data, South Australia’s average home owner mortgage is $134,053, while the average amount tied up in an investment property is $58,738.

South Aussies also have, on average, $5659 tied up in outstanding card balances, Payday and Buy Now Pay Later bills.

On average, another $17506 came from car, boat, improvements and personal loans, bringing the total debt to $215,956.

DFA founding principal and data scientist Martin North said the total mortgage debt appeared to be low because the data captured a mix of first-time borrowers with low rates, as well as long-term homeowners who have paid off most of their debt.

“In addition to this, some make more money than the minimum payment rate to pay off the loan faster – which saves them a lot of interest,” he said.

“Having said that, there is a segment of households that are very profitable and under financial pressure.

“Ratings hide real results.

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“Also be aware that there is a lot of other debt in stressed households, when they have cash flow pressure, they turn to credit cards or other debt, often at high interest rates.

“That’s why I focus more on household income than loan balances.”

He said most households would not be affected much by the small rate hike – as long as they kept their jobs.

“There is a segment of the population that already has no income, and for them, a small rate hike will be catastrophic and potentially a tipping point.”

Mr North said first-time buyers who had stretched themselves out to buy would be most affected by the price increase.

“Many will make it more sustainable by reducing the use of funds and investing more available money in paying debts,” he said.

Finch Financial CEO and real estate expert Julian Finch

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Finch Financial founder and CEO Julian Finch said consumers can save more by contacting their lender and asking for a better deal.

“Banks don’t call customers and say they have cheap loans,” he said.
“If you’re not looking, you’re probably paying too much.

He said households must review all expenses, not just borrowing money.

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“Insurance, phone plans and everyday bills often come in without people noticing,” she said.

“Small savings in many areas can make a real difference.

“In a market like this, doing nothing is often the most expensive option.

“Borrowers who stay active are always in a very strong position.”

– with Aidan Devine