The latest Absa Homeowners Sentiment Index (HSI) for Q1 2025 shows that while the Western Cape continues to experience net inward migration, the pace has slowed notably.

Compared to Q1 2024, net migration into the province has declined by 25%, reflecting a sharp drop in the number of semigrants relocating to the region.

The index has a customer-centric view, involving more than 1 000 consumers.

According to ooba Home Loans, the Western Cape accounted for 29% of semigration-related home loan applications in Q1 2024, up from just 14% in early 2020.

While most semigrants (66%) are still buying homes as primary residences, investment purchases have risen sharply, now making up 30% of semigration applications – marking the highest level in five years.

In contrast, semigration-driven holiday home purchases have declined from 7% in 2020 to 4% by the end of 2023.

This shift reflects a combination of factors: surging property prices, growing congestion, long school waiting lists, and the normalization of remote work have all contributed to a slowdown in semigration momentum.

These challenges are prompting some would-be movers to rethink relocating, even as investor interest in the province remains strong.

The index also revealed a downward trend in the average age of homebuyers. Specifically, the average age of first-time homebuyers dropped from 40 to 38 years over the past three years. Similarly, the average age of investors declined from 45 to 43 years during the same period.

Absa’s latest HSI noted that overall homeowner sentiment declined slightly by 2 percentage points to 85% in Q1 2025, down from 87% in Q4 2024.

The dip reflects growing uncertainty around US policy direction and the South African Reserve Bank’s decision not to implement a widely anticipated rate cut in March.

Despite this, the current reading remains the second-highest since the Index’s inception a decade ago.

Buying sentiment held steady at 77% in Q1 2025, maintaining the gains recorded in the previous quarter. The average age of homebuyers continued to decline, with first-time buyers now entering the market at 38.

Selling sentiment declined marginally to 49%, down from 51% in Q4 2024. Many sellers are still adopting a wait-and-see approach, anticipating that they will get better prices in the future.

Buy-versus-rent sentiment dropped by 4 percentage points in Q1 2025. While many renters noted they had now saved enough for a deposit or sought more space, others continued to favour renting for its flexibility and perceived affordability.

Renovation sentiment fell by 3 percentage points to 79%, with most homeowners citing value-adding improvements and quality-of-life enhancements as primary motivators. Rising input costs remain a barrier for many.

Investment sentiment held firm at 85%, sustaining its highest level on record since the Index began. While concerns around economic conditions and the country’s long-term trajectory remain, property continues to be viewed as a resilient investment vehicle.

At a provincial level, the highest overall homeowner sentiment was recorded in Limpopo (93%), the Free State (92%) – marking its highest score on record – and the Northern Cape (92%).

Migration trends continue to shape local dynamics. The Eastern Cape continues to record positive net migration, while KwaZulu-Natal has seen an uptick in outward migration.

“The sustained strength in overall sentiment, particularly in buying and investment confidence, signals not only the resilience of South African consumers, but also a growing optimism around a medium- to long-term recovery in property market activity,” said Nondumiso Ncapai, managing executive: Absa Home Loans.

“Despite near-term pressures, there is a clear belief that property remains a reliable store of value and a pathway to financial security. The momentum in positive sentiment over the last three quarters is expected to continue into the rest of 2025.”

Sustainability

First developed in 2015, the Absa HSI is an indicator of the overall state of consumer confidence in South Africa’s property market. In Q1 2025, the Index was expanded to include new questions exploring consumer perspectives on sustainable living and emerging trends likely to influence this in the future.

The index reveals a growing aspiration among homeowners to live off-grid, with many seeking to replace municipal and state-provided services – particularly electricity and water – in pursuit of greater sustainability and self-sufficiency.

More than three-quarters (76%) of respondents indicated a desire to move away from state-supplied electricity, while nearly half (49%) expressed interest in replacing municipal water sources.

In parallel, households are actively adopting more sustainable practices in their daily lives, with 57% cultivating fruit and vegetable gardens and 42% using solar power for electricity. A

majority of homeowners (64%) are exploring borehole and filtration systems, while 53% are considering rainwater harvesting to improve water security.