The confidence of South African consumers in the future of residential property climbed to 87% in the fourth quarter of 2024, which is the highest level recorded in a decade, with the dominance of first-time buyers in the market relative to other segments an ongoing trend, financial services firm Absa’s 'Homeowners Sentiment Index (HSI)' report shows.

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

“The results bode well for the outlook of the property market into 2025 and are 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,” says Absa Home Loans managing executive Nondumiso Ncapai.

Sentiment to buy improved to 77% in the fourth quarter, 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 of 2024, with some respondents who sold in the past 12 months saying they needed to free up funds.

Further, 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.

Investing sentiment rose 5% to 85% quarter on quarter, which is 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, Absa says.

Additionally, 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.

First-time buyers are expected to remain drivers of market activity for the coming year, displaying high levels of positive sentiment. In 2024, they accounted for 53% of property registrations, Absa’s data shows.

“Recently there has been some relief from an interest rate perspective for consumers, with one 25 basis points 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 says.

“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,” she adds.

Further, 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 states.