Simply Online obo Schnetler's Incorporated, Century City, Cape Town: Lower confidence in SA property, but still a buyers' market | Simply Online

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Simply Online obo Schnetler's Incorporated, Century City, Cape Town: Lower confidence in SA property, but still a buyers' market

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Confidence in the South African property market fell by 3% in the first quarter of 2020 compared to the fourth quarter of 2019, according to the latest Absa Homeowner Sentiment Index (HSI) released on Monday.

The HSI determines consumer sentiment regarding the property market conditions in general in South Africa.


Respondents showed concern about the economic outlook, despite the interest rate cut of 0.25% in January 2020 and another 1.00% in March 2020. The repo rate is currently at 4.25%.

The index report found that at a 73% confidence level in Q1 2020, the overall result indicates that sentiment in the market tends towards reduced activity in the local property market. Fewer respondents are considering it an appropriate time to buy, invest or sell property.

A previous index had shown that in the fourth quarter of 2019 concerns around political instability were subsiding and property's appeal as a secure asset increased. The picture has changed by the first quarter of 2020 due to the current economic uncertainty.

One in six respondents cited concerns about the impact of the coronavirus (Covid-19) pandemic specifically as their reason for a lack of confidence in the property market. However, many respondents still believe that property can play an important role in helping them weather the current uncertain economic environment, mainly due to the ability of property to maintain value over time.


READ | SA house price growth drops again - but for some, it's the chance to find a dream home


The market remains favourable for property buyers and 62% of respondents consider it an appropriate time to buy property, considering the current market, while 23% of respondents consider it an appropriate time to sell property.

The index also reflects investors being the most positive about the property market at the moment, followed by people currently renting and then first-time homeowners. Those who had already owned a home before had the least confidence in the market.

Fin24 reported last week that the latest FNB Property Barometer shows annual house price growth fell to 1.9% in April, down from 2.5% in March – the lowest it has been since December 2009.

Sale prices at the higher end of the market could drop by between 20% and 30%, believes Grant Smee, managing director of Only Realty and founder of property investor hub Epic South Africa. He expects property prices in the mid-range – R1.5 million to R3 million – to decrease by 15% - 20% in some areas, with prices in the affordable range experiencing a 5% - 10% decline.


*Article sourced from News24*


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