Absa’s Homeowners Sentiment Index for the first quarter of 2024 reveals an uplift in confidence in the property market, with overall sentiment among respondents surveyed climbing to 82% as optimism begins to remerge.
In the survey of 1 149 respondents, the number of positive responses rose 4% compared to the final quarter of 2023 and 9% relative to sentiment recorded a year ago.
This quarter's index also indicates healthy growth in sentiment across investors surveyed, surging 6% quarter-on-quarter.
This increase is the highest score recorded in the index’s investor subcategory in three years.
The survey delved into home renovations, finding that recent renovations have been done by consumers mainly to increase property value and rental potential, as well as to create a more comfortable and fresh living environment that matches consumers’ unique décor preferences.
The renovate sentiment increased by 1 pp to 80% compared to Q2 2024, and by 7% compared to Q2 2023.
Most respondents said that they mainly renovate to add value to their properties and to make living spaces more enjoyable.
For others, renovations are driven by the need to do repairs and maintenance to properties. The high cost of materials remains a key detractor.
South Africans are renovating out of necessity while acknowledging that the economy is currently not doing well (up 6% from Q1 2024).
Renovations are planned with specific goals in mind, such as improvements for the purpose of attaining a higher future selling price as well as changing living needs.
Affordability remains a key consideration as consumers indicate that they need to spend sparingly until the economy stabilises.
More than half of respondents believe that property always accumulates in value, with just under half believing you will make a good return.
Property ownership for investment is driven by a common goal of having a stable and high-yielding asset as well as consumers realising the advantages of the current buyer’s market.
Key Findings of the Q1 2024 Homeowners Sentiment Index:
Overall sentiment improved to 82%, up from 78% in Q4 2023, while there was growth in all the subcategories surveyed in the index.
Sentiment to buy property grew 8% to 72% compared to the previous quarter and 11% compared to Q1 2023 – an inflection point in what has been a downward trend since the final quarter of 2021.
Investor sentiment increased by 6% compared to Q4 2023, reaching the highest level since Q1 2021.
There was a notable increase in positive sentiment among first-time homebuyers, with many feeling that now is an opportune time to invest in property.
A significant uptick was also observed among women who now consider it more appropriate to buy rather than rent in Q1 2024.
The security of property as an asset, consistent appreciation in property values over time, and the creation of long-term income were among the main factors cited by respondents concerning the attractiveness of property as an investment class.
This, while a challenging economy, political instability, crime, high unemployment rates and escalating property prices were identified by respondents as significant barriers to market enthusiasm.
"These figures indicate that consumers and investors are increasingly optimistic about the property market's prospects, anticipating better days ahead," said Nondumiso Ncapai, Absa Home Loans Managing Executive.
“While risks remain, sentiment around the property market’s future returns is promising, reflecting what we have known to be true in South Africa for many years – property remains an aspirational and desirable investment.”
While interest rates are now expected to remain higher for longer than expected at the start of 2024, extending the time anticipated for a full recovery of the property market, positive signals in the period under review suggest consumers are already gearing up for better times.
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