Believe it or not, you are wealthier, says Unisa
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.
Momentum/Unisa estimates that the real net wealth of households grew by R96.1bn in the last quarter from R7109bn at the end of the first to R7205.1bn at the end of the second quarter.
Over the first half of 2019, the real value of net wealth increased by R300.4bn.
This means their real net wealth increased by 4.4percent over the six months since the end of 2018. In contrast, their real disposable income was only 0.8percent higher, giving rise to them “not feeling wealthier”, the report said.
It said this growth in households’ real net wealth during this period could to a large extent be ascribed to the real value of their assets increasing more than their outstanding liabilities.