Best news in 11 years from homeowners in South Africa
Absa’s latest Homeowners Sentiment Index (HSI) has reached its best level since its initiation, with the South African property market showing sustained optimism.
The latest HSI for the first quarter of 2026 shows that overall consumer confidence in South Africa’s property market grew by 1 percentage point to 88%.
This is the highest level recorded since the Index was launched in 2015, with the latest figures continuing to show the upward trend seen since 2024.
The index is designed to provide an overall assessment of consumer confidence in South Africa’s property market, with additional insights into consumer confidence in buying, selling, and investing in property.
Absa said that the continued improvement in the index points to a sustained optimism in the country’s residential property market.
The Big Four bank said the overall score was supported by stronger sentiment across all HSI categories.
It added that buying, selling, investing, and renovating all recorded gains in Q1 2026 from the final quarter of 2025.
Selling sentiment saw the largest increase, by 4 percentage points, followed by buying and renovating, each by 3 percentage points
Investment sentiment rose by 2 percentage points. All of the HSIs’ subindices are now at their highest levels to date.
“The main driver of positive sentiment is that many South Africans believe property is a secure asset for investment,” said Tshepo Mashashane, Executive: Strategy & Strategic Communication at Absa Home Loans.
“Homeownership is also an aspirational purchase for many South Africans entering the market for the first time, reflected in the high number of home loan applications from the first-time homebuyer segment.”
Mashashane added that investors are set to play a key role in the market amid ongoing demand for rental properties.
The index also showed stronger confidence among younger South Africans participating in the property market.
Respondents aged 25-34 had the highest confidence level at 90%, accounting for 27% of buyers over the last year.
Respondents aged between 35 and 44, and 45 and 54, recorded confidence levels of 88%, while respondents over the age of 55 were the least confident at 84%.
Confidence around renovations also reached a record high of 82%, which was driven by the belief that renovations increase property value and can deliver stronger returns when selling.
Absa added that high levels of investment confidence were also observed among both existing and aspiring investors, with many believing in property as a long-term investment choice.
Huge risks for the property market
“The developments in the Middle East had not affected homeowner sentiment at the time the survey was conducted, but only time will tell whether there is a delayed impact as the macroeconomic environment changes,” said Mashashane.
“Higher fuel prices and the effect this could have on inflation and the interest rate outlook may still influence sentiment in the months ahead.”
The South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) will announce its next interest rate decision on Thursday, 28 May 2026.
Given the rapid rise in fuel prices and the risks to inflation, the SARB is widely expected to increase the repo rate from its current level of 6.75%.
The rapid rise in inflation caused by the Iran War dampened positive inflation expectations and interest rates from the start of the year.
While the MPC was widely expected to cut interest rates at the start of the year as inflation was under control, the Middle East conflict has led to expectations of a hiking cycle.
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