Cautious optimism from homeowners in South Africa

Absa’s latest Homeowner’s Sentiment Index for Q1 of 2024 shows that there has been an uplift in confidence in the South African property market.

In the survey of 1,149 respondents, the number of positive responses increased from 78% in Q4 2023, to 82% in Q4 2024.

The index also indicates healthy growth in sentiment across investors surveyed, increasing by 6% quarter-on-quarter.

“These figures indicate that consumers and investors are increasingly optimistic about the property market’s prospects, anticipating better days ahead,” said Nondumiso Ncapai, Absa Home Loans Managing Executive.

“While risks remain, sentiment around the property market’s future returns is promising, reflecting what we have known to be true in South Africa for many years – property remains an aspirational and desirable investment,” she added.

Other key findings

Other key finding showed that sentiment to buy property increased by 8% to 72%, which is an inflection point in a downward trend since Q4 2021 – when the SARB start its interest rate hiking cycle.

Investor sentiment also increased by 6% compared to Q4 2023, reaching its highest level since Q1 2021.

There was also positive sentiment for first-time homebuyers, with many feeling that now is the best time to invest in property.

Moreover, there was a significant uptick observed among women who now consider it more appropriate to buy rather than rent in Q1 2024.

In terms of the attractiveness of property as an investment class, the security of property as an asset, consistent appreciation in property values over time, and the creation of long-term income, were among the main factors cited by respondents.

“The Homeowners Sentiment Index serves as a barometer for the health of the property market and reflects the evolving attitudes of consumers towards home ownership and investment in real estate,” said Ncapai.

“The data underscores a growing confidence that is likely to stimulate further activity in the market.”

Although interest rates are expected to remain higher for longer than expected at the start of 2024, positive signals indicate that consumers area already preparing for better times ahead.

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