19 July 2024
- Homeowner sentiment outlook expands to highest score in almost a decade
- Women more optimistic about the future of property than men in Q2
Absa’s Homeowners Sentiment Index (HSI) for the second quarter of 2024 shows that South African homeowners are less interested in alternative power solutions than before, correlating with the stable electricity supply since March this year.
While interest in alternative power solutions (APS) is levelling out, reducing electricity costs continues to be a key driver for those still looking to invest in these technologies, with 69% of homeowners citing it as a crucial factor. The majority of homeowners are relying on personal savings (83%) or personal loans (75%) to fund APS, with their preferences leaning towards hybrid systems (47%), going off-grid (37%), and using generators (30%) for energy independence.
“The shifting appetite for alternative power solutions aligns with broader trends we've observed, where the majority of homeowners renovate primarily to add value to their properties and to make living spaces more enjoyable. However, affordability remains a key consideration as consumers indicate that they need to spend sparingly until the economy stabilises,” said Nondumiso Ncapai, Absa Home Loans Managing Executive.
Now celebrating its tenth year, the Absa HSI is a leading indicator of the overall state of consumer confidence in South Africa's property market. This revamped edition offers a deeper analysis of real estate participation, provides more localised insights for each province along, and introduces findings on emerging trends such as consumer interest in APS, investment factors for these technologies and their preferred financing options for homebuying.
With an expanded sample of respondents interviewed, the survey found that consumer confidence in the country’s property market increased by two percentage points to 84% – the highest it has been since the survey was launched in 2015 – driven by the perception of property being a secure asset that will create sufficient wealth in the long term.
Top Five Property Trends in 2024:
- Over 60% of South Africans applying for home loans are first-time buyers, many of whom seek better financial and property guidance to make well-informed decisions.
- Homeowners and buyers are increasingly eco-conscious, with sustainability now identified as a key driver in homeownership decisions.
- More single women, particularly young black females, are applying to purchase homes than men, emerging as key drivers in the South African property market.
- Renting properties for secondary income, particularly short-term rentals, remains a growing trend.
- The recent recovery in energy supply has diminished consumer interest in going completely off-grid.
Buyer sentiment, which had been on a consistent downward trend since 2021 – the beginning of the rate cycle – saw a significant turnaround in 2024, now reaching 70% in the second quarter. This shift reflects a growing perception of property as a sound investment that appreciates in value and can yield substantial returns. However, potential buyers remain cautious due to concerns about rising interest rates, economic instability, and the increasing cost of living.
Confidence in property investment (80% positive investor sentiment) is also showing significant improvement since 2023, largely due to anticipated future value and current rental demand.
On the other hand, sellers are less optimistic about achieving their desired prices for their properties. Many express a preference to wait if they are not under pressure to sell, reflecting a cautious approach in the current market conditions.
Provincially, confidence in the property market's future saw mixed trends. Inland, confidence increased from 84% in Q1 2024 to 87% in Q2 2024, marking a 3% rise. However, in coastal regions, there was a slight decline of 1%, from 81% in Q1 2024 to 80% in Q2 2024.
“All current indicators show that property price growth is negative in real terms, highlighting a growing mismatch between willing sellers and buyers leading to a subdued market,” said Ncapai. “While the short-term outlook for consumers remains challenging, and it may take some time for conditions to improve, we anticipate that inflation will gradually decline and result in lower interest rates as we approach the end of 2024, offering some relief.”
For further information visit our Homeowner Sentiment Index site .
