Positivity surrounding South Africa’s improved political situation, as well as some greater optimism regarding the country’s economic prospects, have carried over to the property market.
This is according to Absa’s latest Homeowner Sentiment Index (HSI), which measures sentiments of South African consumers with regard to various aspects of the residential property market.
The overall HSI score, which reflects the percentage of survey respondents with positive sentiment regarding residential property market conditions, was only marginally higher at 82% in the fourth quarter of 2017 compared with 81% in the third quarter.
The main reasons mentioned by survey respondents which impacted their perceptions regarding the property market in the fourth quarter were the following:
- Property is a secure asset (33%).
- Property still increases in value (28%).
- A home is essential (11%).
Property-buying sentiment remained on an upward trend in the fourth quarter of 2017, increasing to 70%, after a low of 60% in the first quarter of the year.
The main reasons mentioned in favour of buying property were the following:
- Property prices are relatively low and there are bargains in the market (29%).
- Property still increases in value and is a good investment (23%).
- The rand exchange rate is strong (9%).
The positive sentiment towards selling property improved further to 41% in the fourth quarter of last year, rising from a low of 34% in the second quarter.
The top reasons for selling property were the following:
- Property prices are relatively high and you may get a good price when selling (35%).
- Many people want to own property, which is supportive of selling (13%).
- It is a good time to sell property (5%).
Investing in property
As many as 83% of respondents were positive about property as an investment in the final quarter of 2017, which was much in line with sentiment in the third quarter of last year and the fourth quarter of 2016.
Reasons mentioned why it is an appropriate time to invest in property were as follows:
- It is a good time to investment in property (30%).
- Property prices are relatively low and there are bargains in the market (15%).
- There is a demand for rental properties (15%).
A total of 79% of survey respondents displayed positive sentiment in the fourth quarter of 2017 when asked whether it is a good time to renovate or do alterations to a property. The fourth-quarter positive sentiment regarding property renovations was unchanged from the preceding quarter.
The top reasons mentioned in this regard were the following:
- Renovation increases the value of a property (38%).
- Building materials are currently well-priced (12%).
- It is good to constantly upgrade a property, especially if trying to sell (11%).
Buying rather than renting property
The positive sentiment regarding buying rather than renting property was unchanged at 74% in the fourth quarter of 2017 from the third quarter of last year.
The main reasons mentioned in favour of buying versus renting property were as follows:
- It is better to buy and pay off your own mortgage bond than rent and pay someone else’s bond (29%).
- Property still increases in value and is a good investment (22%).
- Property prices are relatively low and there are bargains in the market (22%).