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Absa notes shift in spending patterns

Johannesburg - SA's affluent consumers are focusing more on personal liquidity management and postponing expenditure on big ticket items, according to the latest Absa Private Bank analysis of customer behaviour.

Gavin Opperman, CEO of Absa Retail Bank, said it had observed a change in the behavioural patterns of affluent consumers, who had been adopting debt reduction strategies.

The changed behaviour impacted cash savings, deposits and annuity-based investments, Opperman said.

Affluent consumers have adopted a wait-and-see attitude with regard to major purchases while also monitoring economic developments, particularly the future direction of interest rates, the bank said.

"Consequently, there is a sharp decrease in the 'buy-to-let' residential market and an evident trend of consumer preference to adopt longer vehicle finance contract periods to aid the affordability of more expensive cars," Opperman said.

He said that low-risk, medium-term returns with some flexibility in terms of liquidity seemed to be favoured by the affluent at the moment.

"We see a trend of wealth preservation, with the bulk of investments being made in the fixed-income and money market funds," said Opperman.
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