South Africans are feeling increasingly optimistic about their homes, with the overall homeowner sentiment index rising to 87% in the fourth quarter (Q4) of 2024, up 3% from the previous quarter.
This marks the highest level in a decade.
The Absa Homeowner Sentiment Index (HSI), which is derived from a survey of over 1,200 income-earners across metropolitan areas, cities, and towns, shows significant growth.
The sentiment to buy has increased to 77%, up from 73% in Q3, continuing an upward trend that began in the second quarter of 2023.
Meanwhile, sentiment around investing in property saw a 5% rise to 85% quarter on quarter—representing the most substantial growth across the survey’s key metrics.
“Investors feel now is the time to expand their portfolios as the economy is showing signs of recovery,” the report stated.
“This result bodes well for the outlook of the property market into 2025 and reflects the resilience of South African consumers, who remain optimistic as they recover from a prolonged cost-of-living crisis,” commented Nondumiso Ncapai, Managing Executive at Absa Home Loans.
Sentiment toward selling also grew, rising to 51% from 48% in the third quarter of 2024. Some respondents who had sold property in the last 12 months cited the need to free up funds.
Additionally, 77% of participants expressed confidence in buying rather than renting, marking a 4% increase from the previous quarter.
This was driven by the belief that homeownership is more advantageous than renting.
Optimism around property renovations also increased by 3%, reaching 82% in Q4 2024, with some respondents planning renovations for aesthetic reasons, while others focused on maintenance and preserving future property values.
The report noted that the increasing shift towards single women applying to purchase homes remained prevalent among first-time homebuyer applicants.
The Western Cape continues to attract interest, with semigration from Gauteng driving a 22.5% year-on-year increase in net inward migration, according to Deeds Office statistics.
First-time buyers made up 53% of property registrations in 2024.
Consumers have faced a challenging period. In addition to high interest rates and the ongoing cost-of-living crisis, consumers in 2024 also dealt with frequent loadshedding, logistical issues at local ports, rising geopolitical tensions, and pre-election uncertainty.
Despite these challenges, consumer resilience has remained strong, and a sense of cautious optimism has persisted in survey responses over the past 12 to 18 months.
With consumer inflation gradually dropping below the South African Reserve Bank (SARB) target midpoint of 4.5%, electricity supply stabilising by Q2 2024, and a positive election outcome providing greater certainty, there was a noticeable improvement for consumers by the end of 2024.
This optimism was further reinforced as homeowners benefitted from two 25 basis point (bps) rate cuts in 2024—one in September and another in November.
Looking ahead, the HSI cautioned that risks still exist in the first quarter of 2025, which could influence consumer sentiment in the property market throughout the year.
These include: the potential signing of the Land Expropriation Bill into law, South Africa’s diplomatic and economic relationships with the US, the SARB’s March conference on the inflation target, political dynamics within the Government of National Unity, the progress of Phase 2 of Operation Vulindlela, and the National Budget outcomes.
“Recently, there has been some relief for consumers in terms of interest rates, with one 25bps rate cut in January and another expected in March. Positive trends in House Price Indices, including the Absa House Price Index, are also likely to support the property market’s gradual recovery in 2025,” Ncapai said.
