South Africa’s property market has shifted – and more people are nervous about buying homes

Absa has published its Q2 Homeowner Sentiment Index (HSI), which shows the average consumer confidence level regarding the property market in South Africa.

The index results were collected at the end of June, with some respondents being interviewed during the acts of violence and destruction to property seen in KwaZulu-Natal and Gauteng at the beginning of July 2021, which is reflected in the results.

The index shows that overall sentiment is down 4% in Q2 2021, ending at 77%. The reasons that were given by respondents who are not confident about the South African property market include:

  • Economic and political instability  – up 25% compared to Q1 2021;
  • The high levels of crime and unemployment – up 28% compared to Q1 2021;
  • Land expropriation without compensation making property an uncertain investment.

“Sentiment towards buying property has decreased for the first time since Q1 2020, ending a streak that saw the achievement of the highest buying sentiment recorded in Q1 2021,” Absa said.

“Respondents who own property as investments have continued to be the most positive about buying property (with a buying sentiment of 82%), reasoning that property is always a good investment.”

In the last few installments of the HSI, Absa noted that general uncertainty due to Covid-19 is subsiding and giving way to concerns around specific outcomes of the pandemic.

“In the Q2 survey, we have seen general uncertainty return as a driver of negative certainty. We believe this to be due to Gauteng having been in the throes of a third wave, with ample coverage of measures being put in place by the Presidency.”

Sellers still positive 

Sentiment towards selling property was the only subindex that did not see a reduction against the previous quarter.

Respondents continue to believe that they can get a good price for their property – although fewer respondents mentioned this as a driver, Absa said.

“Selling sentiment remained unchanged against Q1 while buying sentiment reduced for the first time in five quarters.

“This has resulted in the gap between buying and selling sentiment reducing by 7%. The segment of respondents who hold property as investments were the only ones to have had a reduction in sentiment towards selling property – having done so for the second consecutive quarter and showing their growing appetite to hold investment property.”

This resulted in an enabling environment for property investors – one where they are bullish while other players are bearish, Absa said.


Read: Here’s a look at the property market in Cape Town, on the other side of the mountain.

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South Africa’s property market has shifted – and more people are nervous about buying homes