Consumer confidence in South African Real Estate hits 10-Year high, Absa Report reveals

South African consumers are feeling upbeat with their confidence in the future of residential property climbing to 87% in the final quarter of 2024 - the highest level recorded in a decade with the dominance of first-time buyers in the market relative to other segments an ongoing trend

Report Highlights

• Consumer confidence in South African real estate reaches a 10-year high, with 87% optimistic about property’s future.
• First-time buyers dominate, driving market activity, making up 53% of property registrations in 2024.
• Positive sentiment towards buying, investing, and renovating properties shows continued growth into 2025.

This according to the Absa Homeowner Sentiment Index, a barometer of consumer confidence across six key metrics in the country’s housing market. The survey, which sampled over 1,200 participants who earn an income and hail from metropolitan areas, cities and towns, also showed growth across all its measurement categories.

“This result bodes well for the outlook of the property market into 2025 and is indicative of the resilience of South African consumers who are optimistic even as they emerge from the burden of a protracted cost-of-living crisis,” said Nondumiso Ncapai, Managing Executive at Absa Home Loans.

Sentiment to buy and invest in property returned strong results in Q4 2024, while confidence to sell surpassed the 50% mark after trailing below this midpoint for the last two years – good news for the future of property stock levels in the market.

Unpacking the key metrics in Q4 2024

• Sentiment to buy improved to 77% in Q4 2024 from 73% in the previous quarter and has been on an upward trajectory since the second quarter of 2023.
• Selling sentiment grew to 51% from 48% in the third quarter 2024, with some respondents who sold in the last 12 months saying they needed to free up funds.
• Investing sentiment rose 5% to 85% quarter on quarter – the strongest growth across the survey’s key metrics. Investors feel now is the time to expand their portfolios as the economy is showing signs of recovery.
• 77% of respondents said they were confident to buy rather than rent, up 4% from the previous quarter, driven by the belief that it is more beneficial to own a home than rent one.
• Optimism around renovating property grew 3% from Q3 to 82% in final quarter of last year, with some planning to renovate for aesthetic reasons, some for maintenance and to safeguard the future value of their properties.

Looking ahead

First-time buyers are expected to remain drivers of market activity, displaying high levels of positive sentiment. In 2024 they account for 53% of property registrations, according to Absa data.

“Recently there has been some relief from an interest rate perspective for consumers, with one 25bps rate cut made in January and another forecasted in March. There is also positive movement in House Price Indices, including the Absa House Price Index, which is likely to spur the property market’s gradual recovery into 2025,”

Ncapai said. “While we continue to monitor key developments in the geopolitical arena as well as within our own country’s government of national unity, we remain optimistic about the prospects for South African consumers and businesses in the real estate environment.”

While South African consumers are only just beginning to recover financially on the back of the nation’s recent cost-of-living crisis, the aspiration of homeownership remains strong, and a large base of potential buyers are looking for opportunities to participate in the market, Ncapai added.

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