What’s happening with homeownership in South Africa? The Absa HSI identifies key trends

Editor

The Absa Homeowner Sentiment Index for Q1 2025 highlights five key residential real estate market trends:

• The average buyer age is decreasing: in the last three years, the average age of first-time homebuyers has decreased from 40 to 38. For the same period, the average age of investors has decreased from 45 to 43.
• A growing appetite for going off-grid: the sentiment about going off-grid is dominated by a desire to replace electricity services, as indicated by 76% of respondents, with 49% indicating a notable interest in replacing water services as well.
• First-time homeowners continue to drive market activity: this group makes up more than half of total applicants. This subsegment still displays a high level of positive sentiment in the future of the property market compared to other segments. As cashflows and affordability improve, we foresee continued growth in first-time buyers entering the market.
• Inter-provisional slows down: while the Western Cape still has positive net migration, this has slowed down compared to the previous three quarters (25% down vs Q1 2024). The Eastern Cape is seeing continued net inward migration, whereas KwaZulu-Natal saw an increase in outward migration.
• Continued strong investor confidence: investors remain confident in expanding their property portfolios with more investors believing that there is currently good demand for rental properties. The Q1 HSI investor remains the highest since this survey was first conducted in 2015.

The extensive quarterly report explores buying, selling, investing and renovation trends across the country.  Here is a quick snapshot.

Are buyers looking, or waiting?

Key summary: Buyer’s sentiment remained at 77% in Q1, 2025. The buying sentiment has been on an upward trajectory since Q2, 2023.

Sellers opt to wait and see

Key summary: Sell sentiment fell back by 3% to 49% of respondents responding positively in the first quarter, compared to 51% in the fourth quarter of 2024.

What about buying rather than renting?

Key summary: Potential future buyers currently renting or buy-vs-rent sentiment declined by 4% in Q1, 2025 compared to the previous quarter.

In conclusion

Although the overall Homeowner Sentiment Index reduced from 87% to 85% quarter on quarter, it still represents the second-highest confidence level reached since the start of the survey in 2015.

Although some uncertainty exists in the market, especially around macro-economic factors, the positive momentum in positive sentiment over the last three quarters is expected to continue into the rest of 2025. 

The buying and investing indices remained unchanged quarter on quarter, with respondents seeing property ownership as a good investment over the long term. Both these sub-indices have been on strong upward trajectories since 2023, with the buying index up from 61% in 2023 Q1 to 77% in 2025 Q1 and the investment index up from 70% in 2023 Q1 to 85% in 2025 Q1.

The first-time homebuyers remain very positive, and this is also reflected in the average age of homeowners trending lower as younger people are applying for home loans. The renovation, selling and buy-vs-rent indices all reduced, citing economic uncertainty as the main drivers. The expected rate reductions that did not materialise in 2025 Q1, the government budget impasse and the discourse on US trade tariffs would have influenced respondents. Affordability also featured strongly as a driver of negative sentiment, and although inflation has reduced since 2023, there is still a lingering cost of living impact on a large number of consumers.

Read the full report here