Monday, August 15, 2022

Homeowner confidence declines, but 42% still think it’s a good time to sell

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Absa forecasts a further dip in buying sentiment because of back-to-back interest rates hikes and expectations of more to come.

Homeowner confidence in SA declined in the fourth quarter of
2021 due to ongoing pandemic-related instability – though overall sentiment
remains high, indicating confidence in the property market.

This is according to the latest Absa Homeowner Sentiment
Index, which surveys consumer confidence levels in the property market in South
Africa.

Homeowner confidence in SA declined by 3% to 79% in the
fourth quarter of 2021 compared to the third quarter due to instability caused
by the Covid-19 pandemic, the index said, although 42% of respondents still
consider it a good time to sell property. First-time homebuyer confidence has
remained strongest.

Key concerns among homeowners included economic stability,
high levels of unemployment, and a lack of job security.

The latest survey was undertaken at the height of the
Omicron wave. Furthermore, unemployment levels in the country increased from
34.4% in the second quarter of 2021 to 34.9% in the third quarter and is the
highest joblessness rate since 2008.

Investors had the highest decline in sentiment towards
buying, citing economic instability, high property prices, as well as showing
an increasing concern around interest rates. 

“This decline in buying sentiment by investors is a
significant change to the previous quarter where this segment’s buying
sentiment had reached its second highest level post lockdown (88%) and now has
the lowest buying sentiment across all segments (79%),” states the index
report.

According to TPN’s vacancy survey, landlords continue to be
under pressure; vacancy rates increased from 10.66% in the third quarter of
2021 to 11.71% in the fourth quarter. This is much higher than the 7.47%
average prior to the pandemic and is coupled with lower rental escalations as
unemployment continues to put financial strain in the renter segment.



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