Surge in indebted consumers

[The_MAC]

Haha, no. Okay, I'll go live in my car

I thought that included your house. Well in that case, you havn't even started paying off your future debt..

 

[Gaz{M}]

You okes should be grateful for all those new car buyers on 40% residual, otherwise you would have nothing second hand to buy!

 

[Devill]

I'm seeing this a lot this year. Got good friends who just lost everything. Many parents at my kids school cannot pay full school fees (public school).

I guess the pursuit of bling has caught up to many people.

This. I have friends that are under 30 with unsecured debt of 30-65k.....

 

[ToxicBunny]

You okes should be grateful for all those new car buyers on 40% residual, otherwise you would have nothing second hand to buy!

Except they want too damn much for their 2nd hand vehicles, since they have ridiculous amounts of debt to pay off.

 

[creeper]

This. I have friends that are under 30 with unsecured debt of 30-65k.....

You'll be amazed what the limits are on credit cards. Some people that I know doesn't get big salaries, get R30-R40k credit limits on credit cards. :wtf:

 

[ToxicBunny]

You'll be amazed what the limits are on credit cards. Some people that I know doesn't get big salaries, get R30-R40k credit limits on credit cards. :wtf:

Banks love dishing out large volumes of credit....

Makes you beholden to the bank forever and ever.

 

[Sinbad]

I think you'll find though that increased debt is more from living expenses being financed on credit, and not from luxury/impulse purchases.
At least that's what's happening in my case.

Salary < expenses despite cutting back seriously.

 

[TehStranger]

I think you'll find though that increased debt is more from living expenses being financed on credit, and not from luxury/impulse purchases.
At least that's what's happening in my case.

Salary < expenses despite cutting back seriously.

While this may happen, I doubt it's the case for most though. Or if it is, they probably got there due to the luxury purchases in the first place. South Africans have a very "flash" mentality.

 

[Sinbad]

While this may happen, I doubt it's the case for most though. Or if it is, they probably got there due to the luxury purchases in the first place. South Africans have a very "flash" mentality.

7 years of "CPI" related increases When cost of living has definitely escalated at more than 6% pa.
My municipal account has gone from R800pm to R4500pm in that period.

 

[TehStranger]

7 years of "CPI" related increases When cost of living has definitely escalated at more than 6% pa.
My municipal account has gone from R800pm to R4500pm in that period.

Ma se... that is quite an increase. I'm sure there are quite a few people in the same position as you are, however I think the vast majority are in the financial *** because of buying the bling to keep up with the [-]Jones'[/-] Zumatellos on credit.

 

[ToxicBunny]

Yeah, most of my financial pain of late is not because of "bling" but just trying to keep my head above water in relation to the increases..

 

[noxibox]

I would love to see more detailed stats on income and expenditure comparisons between now and 40 years go.

My uncle says he thinks that young people want the kind of lifestyle that their parents worked for ages to achieve. They want the fancy car and the fancy house right now, instead of starting small, and the end result is constant indebtedness and high interest payments.

Upgrading houses is itself very costly. You're gambling either way. On top of that the cost of houses has escalated well beyond inflation in every country. In South Africa rents were at least low until quite recently, but now that has changed too.

I'd also like to see a comparison between now and then because as I remember it people were not the paragons of virtue and financial restraint they seem to regularly now be claimed to have been.

Anyone who borrows money to buy a brand new car needs to have their head read.

You okes should be grateful for all those new car buyers on 40% residual, otherwise you would have nothing second hand to buy!

Exactly. Somebody has to buy new cars to feed the secondhand market. South Africa's used car prices are already well on the insane side because not enough new cars being put on the roads.

 

[noxibox]

While this may happen, I doubt it's the case for most though. Or if it is, they probably got there due to the luxury purchases in the first place.

People like to believe this is so, but there has been many a report indicating that people in financial difficulties are borrowing to pay for essentials, not because they can't service debt due to buying luxuries.

South Africans have a very "flash" mentality.

They're not particularly different to anyone anywhere else in fact.

 

[deweyzeph]

Exactly. Somebody has to buy new cars to feed the secondhand market. South Africa's used car prices are already well on the insane side because not enough new cars being put on the roads.

Actually used car prices are insanely high in South Africa because it's virtually impossible to import second-hand cars into South Africa from Japan and other right-hand drive countries due to the motor industry having the government firmly in its pocket. The government needs to urgently remove the red tap and barriers to importing second-hand vehicles into South Africa.

 

[ToxicBunny]

Actually used car prices are insanely high in South Africa because it's virtually impossible to import second-hand cars into South Africa from Japan and other right-hand drive countries due to the motor industry having the government firmly in its pocket. The government needs to urgently remove the red tap and barriers to importing second-hand vehicles into South Africa.

I would be very happy if they did, but it will never happen.

 

[TehStranger]

People like to believe this is so, but there has been many a report indicating that people in financial difficulties are borrowing to pay for essentials, not because they can't service debt due to buying luxuries.

Got any links? Would be interesting to read these reports, assuming they're not about miners striking or similar.

They're not particularly different to anyone anywhere else in fact.

I've noticed stark differences between people overseas and the average South Africa. On average we tend to focus more on the "flash" quite heavily. Of course this behaviour is found globally, but from my own experience SA seems to be a hotspot for it, across almost all LSMs.

 

[Ancalagon]

I've noticed stark differences between people overseas and the average South Africa. On average we tend to focus more on the "flash" quite heavily. Of course this behaviour is found globally, but from my own experience SA seems to be a hotspot for it, across almost all LSMs.

I don't think we are alone in that - I think consumer culture is generally quite big globally.

 

[The_MAC]

And it all starts with the kids : http://mybroadband.co.za/vb/showthread.php/433765-Izikhothane-3rd-degree-last-night

This happens to be a township issue, but I think that it happens all over.

Essentially, regardless of how modest we are, there is a perception that you are being judged by what you own.

 

[Ancalagon]

And it all starts with the kids : http://mybroadband.co.za/vb/showthread.php/433765-Izikhothane-3rd-degree-last-night

This happens to be a township issue, but I think that it happens all over.

Essentially, regardless of how modest we are, there is a perception that you are being judged by what you own.

Not quite related, but it reminds me of an ex girlfriend's sister who, for her 21st, had a party thrown for her that included hand made invitations and place cards and dinner for 80 people at a very expensive restaurant. Plus a R20k booze bill. No, they were not rich by any means.

 

[2026]

It wouldn't surprise me if this sudden surge in bad debt is not linked to the interest rates increase a couple of months back - catching a lot of borderline cases off guard and unable to do anything about it.