South African consumer confidence in the property market is at its highest in ten years, says the Absa Homeowner Sentiment Index.
This means South Africans are currently more confident about the property market than they have been in the last decade.
This could suggest that people are more optimistic about buying or investing in property.
The index revealed that buyers are positive about the future of residential property, with confidence rising to 87% in Q4 2024.
The index, a barometer of consumer confidence across six key metrics in the South African housing market, sampled more than 1,200 participants who earn an income and hail from metropolitan areas, cities, and towns.
While consumer confidence has hit a new high, first-time buyers continue to dominate the housing market relative to other segments.
“This result bodes well for the outlook of the property market into 2025 and is indicative of the resilience of South African consumers who are optimistic even as they emerge from the burden of a protracted cost-of-living crisis,” said Nondumiso Ncapai, Managing Executive, Absa Home Loans.
The sentiment to buy and invest in property reported strong results in Q4 2024, while confidence to sell exceeded the 50% mark after trailing below this midpoint for the last two years. This is good news for the future of property stock levels in the market.
Key metrics in Q4 2024
– The sentiment to buy increased to 77% in Q4 2024 from 73% in the previous quarter and has been on an upward track since the second quarter of 2023.
– The selling sentiment grew from 48% in Q3 2024 to 51% in Q4 2024. Some respondents who sold their property in the last 12 months said they needed to free up funds.
– Optimism regarding property renovations rose by 3% from Q3 to 82% in Q4 2024, driven by plans to enhance aesthetics, maintain properties, and protect their future value.
– The sentiment for investing improved by 5% to 85% quarter on quarter, which is the strongest growth across the survey’s key metrics, with investors feeling that now is the time to expand their portfolios as the SA economy is showing signs of recovery.
– Seventy-seven percent of respondents expressed confidence in buying rather than renting, marking a 4% increase from Q3 2024. This shift is attributed to the belief that owning a home offers greater benefits than renting.
Looking ahead
First-time buyers are expected to remain drivers of market activity, showing high levels of positive sentiment.
According to the Absa data, first-time buyers in 2024 accounted for 53% of property registrations.
“Recently, there has been some relief from an interest rate perspective for consumers, with one 25bps rate cut made in January and another forecasted in March. There is also positive movement in House Price Indices, including the Absa House Price Index, which is likely to spur the property market’s gradual recovery into 2025,” Ncapai said.
“While we continue to monitor key developments in the geopolitical arena as well as within our own country’s government of national unity, we remain optimistic about the prospects for South African consumers and businesses in the real estate environment.”
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