Publications
Partners
Johannesburg – The Momentum/Unisa Household Wealth Index on Friday revealed a second consecutive (quarterly) strong increase in the value of nominal wealth during the fourth quarter of 2012 so that it surpassed R6 trillion for the first time.
The data however also showed that households are worse off due to relatively recent recessionary factors.
Analysis has shown that the recession of 2008/2009 reduced the real value of household wealth significantly and the knock-on effects of this are due to be keenly felt.
Expressed in years‚ the recession wiped out five years of household wealth. This will have consequences for the retirement age of individuals and the contributions they are making towards their retirement funds. To realise pre-recession expectations‚ individuals are going to have to save and invest more and work longer.
“Despite nominal increases in net wealth‚ real household wealth per household is not at all sufficient for purposes of independent retirement or maintaining current living standards. Too many households – especially those who are in a position to accumulate assets thanks to strong increases in their real disposable income over the past decade – apportion insufficient shares of their income towards asset accumulating investments as they rather purchase consumption goods‚” said Prof Bernadene de Clercq‚ head of the Personal Finance Research Unit at Unisa’s Bureau of Market Research.
Nominal household wealth increased at a seasonally adjusted and annualised rate of 28.8% in the fourth quarter 2012 following an increase of 16% in the third quarter 2012 (quarter on quarter seasonally adjusted percentage change expressed at an annual rate - qqsaa).
The main driving force behind the increase in nominal household wealth was a strong increase in the value of South African household assets.
Momentum/Unisa estimated the nominal value of South African household assets at R7.8 trillion at the end of 2012‚ while liabilities approximated R1.5 trillion.
However‚ when expressed in real terms (2005 prices)‚ the picture changes somewhat.
Analysis shows real household wealth increased by 14.2% in the fourth quarter 2012 to R4.1 trillion.
This was mainly as a result of real household assets increasing by 13.6% in the fourth quarter 2012‚ outpacing the real increase of 10.9% in household liabilities (both increases in qqsaa terms).
The main source of the increase in the value of South African household assets was the strong performance of financial assets‚ which constituted 72% of the value of total nominal assets by the end of 2012.
The value of financial assets was driven by the performance of share prices and equity holdings. On an annualised basis‚ the Johannesburg Securities Exchange (JSE) All Share Index increased by 45.2% during the fourth quarter.
The data however also showed that households are worse off due to relatively recent recessionary factors.
Analysis has shown that the recession of 2008/2009 reduced the real value of household wealth significantly and the knock-on effects of this are due to be keenly felt.
Expressed in years‚ the recession wiped out five years of household wealth. This will have consequences for the retirement age of individuals and the contributions they are making towards their retirement funds. To realise pre-recession expectations‚ individuals are going to have to save and invest more and work longer.
“Despite nominal increases in net wealth‚ real household wealth per household is not at all sufficient for purposes of independent retirement or maintaining current living standards. Too many households – especially those who are in a position to accumulate assets thanks to strong increases in their real disposable income over the past decade – apportion insufficient shares of their income towards asset accumulating investments as they rather purchase consumption goods‚” said Prof Bernadene de Clercq‚ head of the Personal Finance Research Unit at Unisa’s Bureau of Market Research.
Nominal household wealth increased at a seasonally adjusted and annualised rate of 28.8% in the fourth quarter 2012 following an increase of 16% in the third quarter 2012 (quarter on quarter seasonally adjusted percentage change expressed at an annual rate - qqsaa).
The main driving force behind the increase in nominal household wealth was a strong increase in the value of South African household assets.
Momentum/Unisa estimated the nominal value of South African household assets at R7.8 trillion at the end of 2012‚ while liabilities approximated R1.5 trillion.
However‚ when expressed in real terms (2005 prices)‚ the picture changes somewhat.
Analysis shows real household wealth increased by 14.2% in the fourth quarter 2012 to R4.1 trillion.
This was mainly as a result of real household assets increasing by 13.6% in the fourth quarter 2012‚ outpacing the real increase of 10.9% in household liabilities (both increases in qqsaa terms).
The main source of the increase in the value of South African household assets was the strong performance of financial assets‚ which constituted 72% of the value of total nominal assets by the end of 2012.
The value of financial assets was driven by the performance of share prices and equity holdings. On an annualised basis‚ the Johannesburg Securities Exchange (JSE) All Share Index increased by 45.2% during the fourth quarter.
