South Africa’s ‘luxury living’ citizens are falling behind on their home and car loans – here’s what they are paying

Experian South Africa’s Consumer Default Index (CDI) deteriorated from 4.02 in December last year to 4.33 in March 2021, as people struggled to keep up with their payments related to the increased economic activity following the easing of strict lockdowns towards the latter part of 2020.

The decline resulted from the collective worsening for all products comprising the CDI, except home and retail loans. Home loans showed a slight improvement from 1.86 in March 2020 to 1.73 in March 2021 as consumers continue to focus on and invest in their homes as it has increasingly become a hybrid place of work.

What is evident is that the deterioration correlates with consumer needs – vehicles have become less of a priority since the onset of Covid as commuting to work was no longer essential. Similarly, consumers are increasingly accessing personal loans and using available revolving credit card facilities to cover daily living expenses.