South African household finances softened in the first quarter compared to the fourth quarter.
South African Reserve Bank Quarterly bulletin data showed that this was because growth in real personal disposable income had slowed. Additionally, employment declined and net assets declined from the fourth quarter.
Household credit grew at a slow pace in the first quarter of 2026. Growth in most categories of credit to households remained slow. However, the increase in household debt still exceeds the gain in nominal disposable income of households.
This resulted in the ratio of household debt to nominal disposable income increasing from 61.8% in the fourth quarter to 62.2% in the first quarter of 2026. This remained well below the recent peak of an annual average of 74.8% in 2009.
debt service cost
The cost of debt servicing relative to households' disposable income was stable at 8.4% in both quarters. It represents a fixed prime lending rate. So one should expect an increase in the second quarter as interest rates rise.
household wealth
The net worth of households decreased in the first quarter compared to the fourth quarter due to a decrease in total assets and an increase in total liabilities. The lower value of property was due to the fall in share prices, while the value of the housing stock increased marginally.
As a result, the ratio of net Property Nominal disposable income declined to 440% in the first quarter, from 446% in the fourth quarter.
All JSE shares declined by 3.3% in the second quarter compared to the first quarter, so net assets should also decline in the second quarter.