South Africa’s residential property market sentiment remained elevated in the second quarter of this year, with Absa’s latest Homeowners Sentiment Index (HSI) recording an 84% positive response.
This marked the strongest consecutive three-quarter performance since the Index was launched in 2015, underscoring sustained consumer confidence in property as a long-term investment asset.
“Property investment is largely driven by the common goal of owning a stable, high-return asset, along with the growing awareness of the benefits of earning additional or passive income,” said Nondumiso Ncapai, Absa Home Loans managing executive.
“With many South Africans optimistic about economic recovery, there is increasing recognition of property’s potential to generate value now and build wealth for future generations,” Ncapai said.
The positive outlook for property as an investment is said to be underpinned by several key perceptions among South African consumers. Over half (53%) believe that property consistently gains value over time, while 52% see it as offering good returns.
Nearly half (48%) view it as a reliable source of passive income, and 47% cite strong demand for rental properties as a motivating factor. Looking ahead, 42% anticipate continued growth in demand, reinforcing confidence in the property’s long-term investment potential.
At the same time, investors remain cautious about several risks, chief among these being the broader economic climate, with 51% citing poor economic performance as a key deterrent.
Other concerns include the weak rand (33%), high property prices (36%), and affordability challenges among tenants, particularly in the context of job insecurity and unemployment, with 29% worried that tenants may be unable to pay rent and 27% highlighting broader concerns about labour market stability.
In Tuesday’s Nedbank Daily Market Snapshot, Nedbank CIB research analyst Reezwana Sumad said Monday was a good day for the US Dollar as the US and European Union (EU) reached a trade agreement.
“The USD had its best day since May, with the EUR losing around 180 pips, moving down from a high of 1,1770 to close in New York around 1,1590. The GBP fared a bit better, only losing around 90 pips on the day, drifting lower from around 1,3450 to close in New York around 1,3355,” Sumad said.
She said the rand also fell victim to the USD strength, as the local markets started the day around R17,75, moving higher towards 17,87. She said much of the local day was spent trading between R17,83 and R17,88, New York saw another move higher towards R17,91, but towards the close, the rand drifted aback towards R17,8700.
This morning, at the time of writing, the rand is back to trading at around R17,90, the EUR 1,1585 and the GBP 1,3350.
The Absa HSI is a leading indicator of the overall state of consumer confidence in South Africa’s property market.
In the second quarter of 2025, overall homeowner sentiment climbed by one percentage point to 86%, suggesting that persistent economic concerns have not significantly dampened consumer confidence. The uplift was supported by easing inflation and expectations of stable or gradually declining interest rates.
The ongoing semigration shifts were also noted in the HSI report, with the Western Cape and Eastern Cape continuing to see a positive net migration over the most recent quarter, similar to levels observed in the previous quarter.
Gauteng remains the biggest net loser of property owners, with a 24% increase in net outward migration.
Ncapai said that looking ahead, a further interest rate cut is anticipated in July, according to the Absa house view, which should help sustain the stability in consumer sentiment this market has enjoyed in the last year.
