The latest Absa Homeowner Sentiment Index (HSI) has indicated that confidence in the South African property market has improved by 4%, to end 2020’s fourth quarter at 80%.
The main drivers of the positive and negative sentiment-related factors mentioned were ‘property always increases in value’ (55%), ‘property is, and always has been a secure asset’ (55%), ‘the economy is unstable’ (59%) and ‘levels of employment are too high’ (55%).
While the jury was still out regarding property prices in Absa’s Q3 2020 survey, property prices have shown themselves to be a driver of selling sentiment while buying sentiment continues to benefit from low interest rates which has made debt financing more affordable.
Sentiment towards buying property has had its third consecutive quarter of improvement, ending 2020’s fourth quarter at 78%, the highest since the introduction of the HSI. The low interest rate cycle continues to play and important role in driving this.
Non first-time homeowners showed a stagnating sentiment towards selling property due to perceived low selling prices and showed the strongest growth in sentiment towards renovating property.