Although it might not feel that way, South African households’ real net wealth increased by R300.4billion over the first six months of 2019. This dissonance - of actually being wealthier but not feeling it - might stem from confusing income and wealth.
Tough economic times are making it difficult for households to finance their expenses with their income, but their wealth grew because the value of their assets increased more than their outstanding debt.
The report, compiled by economist Johann van Tonder, taxation guru Bernadene de Clercq and researcher Carel van Aardt, noted that the real value of household assets increased by R109.6bn, or 1.3percent in the second quarter over the first to R8623.8bn.
“This increase can be attributed to a better performance of financial assets, such as growth in the value of pension funds and other investments, while residential asset growth struggled to gain traction,” the report said.