Cape households have biggest debts
Johannesburg - Households in the Western Cape have the highest levels of indebtedness in the country, probably because property in the province is relatively expensive.
In 2009 the ratio of debt to disposable income for households in the Western Cape was 101%.
This has emerged from research by Unisa’s Bureau for Market Research (BMR). Gauteng was second with 88%, and the Free State third with 87%.
Clinton Martle, Western Cape regional sales manager for for First National Bank (FNB), said the figure was no surprise because property comprised a good proportion of household debt.
Consumer good prices did not vary much from province to province, but property values did, and the Western Cape with its scarcity of land had some of the country’s most expensive property, he said.
FNB property analyst John Loos said property values in the Western Cape and the annual income per capita probably played a role in the province’s higher debt ratio.
According to figures from Global Insight, in 2009 Gauteng had the highest annual per capita income of R56 874, followed by the Western Cape with R49 757.
Loos says between these two provinces and the Northern Cape there was a significant gap, with the latter’s annual per capita income at R33 036, and the Free State’s at R29 738.
The province with the lowest per capita income was Limpopo, with R22 576. It also had the lowest debt ratio, 54%.
The scarcity of land in the Western Cape resulted in the average stand and house size there being considerably smaller than those in Gauteng and KwaZulu-Natal.
According to FNB the average size of a full-title stand in the Western Cape was 632m², compared with 819m² in Gauteng and 1 019m² in KwaZulu-Natal.
The average size of a full-title house in the Western Cape was 152m², in Gauteng 179m² and in KwaZulu-Natal 165m².
Martle said the scarcity of land in the Western Cape also affected parking space, with 75% of the sectional title units in the province having no allocated parking, compared with 38% in KwaZulu-Natal and 17% in Gauteng.
In the second quarter of this year, properties in the Western Cape remained in the market for an average of 16 weeks and four days before being sold. This compared with 10 weeks and one day in the first quarter, according to FNB’s property barometer.
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