South Africans remain confident about the property market, according to Absa’s Homeowner Sentiment Index Q3 2021, having increased by 5 percentage points ending Q3 2021 at 82%.
81% consider it an appropriate time to purchase property with sentiment towards buying property having rebounded to Q1 levels. Those, who own property as investments, continued to be the most positive about purchasing property with buying sentiment of 88%. This group believes that property will always be a good investment. The non-first-time homeowners had the lowest buying sentiment for Q3, citing economic instability and financial strain.
39% consider it the best time to sell property with sentiment recovering to pre-lockdown levels – a 4 percentage point increase. More homeowners, who are not investors, believe that if you can no longer afford a property, you should rather sell it.
81% say now is the time to invest in property with most investors believing that there are some potential bargains on the market and that there will be a high demand for rentals due to the pandemic.
83% would prefer to buy rather than to rent in the current market. Being unable to afford buying right now, and job security or risk of unemployment, were leading concerns for all groups except for the investors who mainly cited political instability (80%) as a concern.
74% consider it the right time to renovate or to make alterations. Interestingly, non-first-time homeowners scored the highest in the renovation sentiment. First-time homeowners cited that it is good to update or change your property with repeat homeowners believing that renovating will bring better returns when selling. Investors were the only property owners with a decline in sentiment towards renovating and/or making alterations, believing that materials are expensive with the potential of over capitalising.
As the municipal elections were approaching, there was growing concern from the investor segment around political instability (80%) and a risk of land expropriation (100%).
Absa has witnessed an uptake in sentiment towards selling, which could be a good sign for the market.
The emerging trend of selling, if you can no longer afford, will potentially address some of the stock shortage.