The recently released Absa Homeowner Sentiment Index (HSI) indicates that confidence in the South African property market improved by 2%, to end 2020’s third quarter at 76%.
While understanding the overall confidence level of consumers is important, Absa also measures various aspects of these confidence levels referred to as ‘sub-indices’. In the report, sentiments about the current timing for buying, selling, and investing in property is measured.
Key summary:
The report indicates that the market continues to garner positive sentiment towards buying property (buying sub-index) with the current property prices and interest rates being the prominent drivers for this sentiment.
Low property prices are still the number one driver for positive buying sentiment (38% of respondents cited prices as the driver of buying sentiment) with current interest rates the number two driver for buying sentiment (36% of respondents cited interest rates as the driver for positive buying sentiments). Interest rates moved from being the number seven driver in 2019’s fourth quarter (4% of respondents).
The five interest rate cuts this year, amounting to 3.00% (of which 1.50% occurred in the second quarter of 2020 and 0.25% occurred in the third quarter of 2020).
Covid-19-specific mentions continue to decline as a reason for low confidence in the property market while concerns about lacklustre economic performance in general, continues to increase.
