Absa HomeownerSentiment IndexQ1 2024
South Africa’s views on the future of the residential real estate market are starting to look promising with Absa’s Homeowner Sentiment Index (HSI) for Q1 2024 recording the highest quarter-on-quarter sentiment increases around buying, investing, and buying versus renting.
Overall, positive responses increased to 82% during the quarter, 4% higher than Q4 2023 and significantly higher (9%) than in Q1 2023.
Seller sentiment, albeit muted, showed a slight increase when compared to the previous quarter (1%). Many of Absa’s customers indicated their reason for selling as relocation – based on finding better employment opportunities. For others, selling is driven by lifestyle needs i.e., upgrading. Interestingly, many of the sellers previously bought homes with the intent to upgrade and to sell as an additional form of income.
The renovation sentiment (improvements or alterations) increased by 4% to 79% compared to Q4 2023 and by 7% compared to Q1 2023. Most of those surveyed indicated that they mainly renovated to add value to their properties and to make their living spaces more enjoyable. For others, renovations are driven by the need to do repairs and maintenance with the high cost of building materials a key detractor.
The buying sentiment improved by 8% to 72% compared to Q4 2023 and 11% compared to Q1 2023. Buying sentiment has been on a consistent downward trend since Q4 2021 (the start of the interest rate cycle) but turned significantly during Q1 2024. Absa customers indicated that they feel “slightly” more confident to buy in respect of overall financial position and affordability. The main drivers for buying sentiment include growing families and the need for more space.
The buy versus rent sentiment (potential future buyers who are currently renting) increased by 6% to 73% in Q1 2024 compared to Q4 2023 and by 12% compared to Q1 2023. Many stated that they have now saved enough to afford a deposit on a home while others want to buy due to relocation and finding new opportunities. For those who still prefer renting, the flexibility this option provides remains attractive.
The investing sentiment increased by 6% to 82% in Q1 2024 compared to Q4 2023, the highest result recorded since Q1 2021 and an indication that property investors feel that it is an opportune time to invest for future value and returns.
