Financial services provider Absa's Homeowner Sentiment Index recorded a recovery in confidence levels in property in the third quarter of 2021.
This matches property developer Rawson Property's experience of market activity, and suggests that this year could be a good year for property, says Rawson Property Group MD Tony Clarke.
“I do not think 2022 will bring about a complete turnaround for buyer and seller dynamics, but I think we’re going to see a more level playing field moving forward. This returning balance should also begin to stabilise the demand-to-supply ratio, which has been leaning heavily towards demand since [the start of the] lockdown.
“Under normal circumstances, this may cause property price growth to slow, but I do not believe this will be the case for 2022.
"I think we are more likely to see a slow and steady return to healthy appreciation after a long period of suppressed growth. This will, however, depend on some external factors like economic recovery, but I firmly believe that we have what it takes to make this a truly spectacular year,” he says.
While only 38% of the Absa HSI respondents felt current market conditions to be appropriate for selling, this was 4% higher than the previous quarter.
This seemingly modest rebound brought sentiment back to pre-lockdown levels, supporting Rawson's on-the-ground experience of returning seller confidence.
“We’re seeing more favourable sales happening for sellers these days, particularly when properties are priced and marketed strategically,” Clarke adds.
Homeowner sentiment ended the third quarter at 82%, or five percentage points higher than the second quarter of 2021.
“It’s interesting to see that, although buyer sentiment rose 6% from the second to third quarter, it still ended 1% lower than the first quarter. This isn’t entirely unexpected, because 2020’s boom of buyer enthusiasm had to level off at some point. We expect it to hover around this point for some time to come, despite November’s interest rate increase,” says Clarke.
Gauteng scored highest for property market sentiment, climbing to 83% overall. The Western Cape came in second at 82%, and KwaZulu-Natal third at 79%.
Meanwhile, investors are currently the most positive about buying property, with sentiment levels at 88%. Sentiment towards buying instead of renting reached its highest levels since the inception of the Absa HSI, at 83%, despite some reservations over job security and the reduced flexibility offered by home ownership.
Further, the Absa HSI found non-first-time-homeowners to be the least positive about buying property, although they score the highest for renovation sentiment.
However, activity on the ground paints a slightly different picture, with significant action from repeat buyers in recent months, avers Clarke.
“The property market in 2020 was largely driven by first-time buyers, but we had a lot more repeat buyers entering the market in 2021. We believe this to be a direct result of improvements in sentiment towards selling property, which is something most existing homeowners need to keep in mind when preparing to buy,” he says.