Absa has published its Q2 Homeowner Sentiment Index, which asked 1,000 consumers questions to gauge their confidence on various aspects within the local property industry.
The index shows that South Africans have grown increasingly confident in the local property market as confidence stands at 74% in Q2 2020 – a 1% improvement vs Q1.
Although respondents continue to be concerned about the economic outlook, this concern has continued to drive them towards property ownership overall – with more considering it a good time to buy property and a bad time to sell property.
“The market continues to be favourable for buyers, with the current interest rates and property prices being the prominent drivers for this sentiment
“The highest overall confidence in the property market is amongst respondents who have never owned property before. While all the respondent segments agree that it is better to buy rather than to rent, current renters had the smallest increase in the sentiment to buy vs rent.”
Absa said it has seen a shift in the key driver of why respondents are choosing to invest in the market – moving away from being based on seeing property as a good investment, to a focus on the low prices in the market – a trend that has continued in Q2 2020.
While low prices continue to be the main driver for positive buying sentiment, low-interest rates are cited as a driver increased by 8%, from 4% in Q1 2020.
“Respondents have continued to cite the current negative climate as making this an appropriate time to buy property,” Absa said.
“This points to a belief by respondents that property will maintain its value / have less value eroded in the long term, and this will mitigate downside caused by the economic negativity”.
Absa said that low prices are also a driver for lower sentiment for selling property.
“The shift in the role of the economic outlook on the lower sentiment to sell property – and property’s ability to help homeowners weather the storm of uncertainty – that we started seeing in the Q1 2020 HSI will likely be sustained (in part) by the low-interest rate cycle relieving pressure from otherwise pressured sellers,” the group said.