South Africans remain confident in property despite the economic challenges

South Africans continue to see property as one of the most stable and rewarding investments, even amid economic uncertainty. The Absa Homeowner Sentiment Index (HSI) for Q3 2025 shows that overall confidence in the property market remains high at 85%, only slightly down from 86% in the previous quarter.

While modest declines in sentiment reflect the impact of slow economic growth and high unemployment, optimism about the long-term value of property remains strong. The report captures how South Africans feel about buying, selling, investing, renting, and renovating, offering a fascinating glimpse into evolving homeowner behaviour.

"We’ve seen strong optimism in the property market hold steady over the past year, and what’s encouraging is that people are acting on it," said Tshepo Mashashane, Head of Strategic Positioning and Partnerships at Absa Home Loans. "It’s especially positive to see more women stepping into homeownership for the first time. It shows that the market is not only recovering, but also diversifying in meaningful ways."

A resilient market backed by consumer confidence

According to the Absa HSI, 85% of respondents remain confident in South Africa’s property market, the third-highest score since the survey began in 2015

This resilience is driven by deeply held beliefs that property is a secure, long-term wealth-building asset. The index revealed that:

• 40% see property as a secure investment.

• 39% believe it always increases in value.

• 36% believe demand for rental properties remains high.

On the other side of the coin, the main factors dampening sentiment include economic instability (44%), political uncertainty (33%), and crime concerns (33%). This underlines broader national challenges rather than doubts about property itself.

Encouringly, the South African Reserve Bank’s three interest-rate cuts in 2025 (bringing the repo rate to 7%) have injected some optimism, though consumers’ disposable income still needs time to recover as the cost-of-living crisis continues to impact consumer spending.

Buying Sentiment: Bargains and long-term vision

The buying sub-index rose 1 point to 75%, marking a consistent upward trajectory since 2023. Many consumers believe now is a good time to buy, with 45% citing property as “always a good investment” and 31% expecting prices to increase further

Interestingly, more respondents in Q3 said that current property prices are low, suggesting that cautious optimism and the perception of “bargains” are driving demand.

Younger buyers (especially in the 18–34 age group) are increasingly preferring ownership over renting, driven by financial independence and investment potential. As one respondent explained: “I wanted to own and potentially get a profit while at it.”

This sentiment aligns with ongoing growth in female homeownership, with single women contributing more than half of first-time home-loan applications in 2025

Selling sentiment: Holding for value, not urgency

Selling sentiment remained stable at 50%, unchanged from Q2. Half of the respondents believe it’s not an ideal time to sell, preferring to hold onto properties as long-term investments.

Those who do sell tend to do so for pragmatic reasons, such as liquidity, debt relief, or life changes like upsizing or relocation, rather than panic or pessimism. Price expectations are cautious but steady, reflecting a “wait-and-see” mindset.

Sellers remain motivated by a recovering economy and the expectation of better prices in the near future, suggesting continued stability rather than market contraction.

Investing sentiment: Property as the ultimate safety net

At 84%, investing sentiment remains one of the most positive indicators in the HSI; this is the second-highest since 2015.

Consumers continue to regard real estate as both a passive-income generator and a multi-generational wealth asset. Nearly 40% of respondents believe property “always accumulates in value,” while 38% view it as a solid source of passive income.

Investors appear especially encouraged by declining interest rates and sustained rental demand, particularly in metropolitan areas where affordability pressures keep rental markets buoyant.

Buying vs renting: Ownership goals remained stable

The sentiment around buying rather than renting remained stable at 75%. Most South Africans still believe owning a home offers more long-term financial benefits, with 40% saying it’s better to own than rent.

However, flexibility and affordability remain key reasons why others choose to rent. Respondents who moved for work, study, or family reasons cited short-term renting as a practical choice while they search for the right property.

This dynamic reflects a healthy balance in the market. There is a strong aspiration toward ownership, but it is coupled with realistic short-term renting decisions in a shifting economy.

Renovation sentiment: Improving homes and value

At 80%, the renovation sentiment remains robust and unchanged from Q2. South Africans are upgrading their homes primarily to add value (48%), improve comfort (49%), and modernise living spaces

The high cost of materials remains a constraint, but this factor is less discouraging than in previous quarters, suggesting that homeowners are finding creative ways to fund smaller upgrades or maintenance.

Renovation activity also aligns with the broader trend toward sustainability, with many homeowners incorporating solar power, rainwater harvesting, and borehole systems into their projects.

Lifestyle trends shaping homeownership

The Q3 report highlights key lifestyle trends driving property choices:

• Semigration surge: The Western Cape and Eastern Cape continue to attract inward migration, with the Western Cape showing an 11.4% quarter-on-quarter increase.

• Co-living households: 38% of respondents now share homes with extended family to manage living costs.

• Sustainability shift: 66% of South Africans want to replace municipal electricity with alternatives; 52% are considering boreholes and 40% rainwater harvesting systems

These trends illustrate how affordability pressures, lifestyle shifts, and infrastructure challenges are reshaping the property landscape.

Regional sentiment: Inland confidence leads the way

Regionally, inland provinces such as Limpopo (92%), Mpumalanga (90%), and Gauteng (86%) recorded the highest confidence levels. Coastal provinces, particularly the Western Cape (81%) and KwaZulu-Natal (85%), remain strong, though slightly lower than Q2 2025

The outlook: Confident, cautious, and poised for opportunity

This suggests that inland buyers perceive more value opportunities, while coastal markets, despite still being in high demand, face affordability constraints.

The Absa Homeowner Sentiment Index (HSI) Q3 2025 points to a market that is both resilient and forward-looking, underpinned by a deep sense of optimism among South Africans. Despite persistent challenges like slow economic growth and high unemployment, confidence in property as a secure, wealth-building asset remains unwavering.

With inflation easing and interest rates holding steady, the outlook for buyers and investors is one of measured growth rather than volatility. First-time buyers are expected to keep driving demand, while investors continue to see bricks and mortar as a safe long-term bet.

As disposable incomes gradually recover and infrastructure investment gains traction, we’re likely to see renewed activity in key markets, particularly in regions boosted by semigration trends and the growing shift toward sustainable, self-sufficient living.

Ultimately, the latest HSI reaffirms what many South Africans already believe: property remains a cornerstone of financial stability and opportunity. It’s a market defined not by speculation, but by resilience, adaptability, and long-term vision; qualities that continue to make homeownership one of the most trusted paths to lasting wealth.