Low property prices number one driver for positive buying sentiment

The recently released Absa Homeowner Sentiment Index (HSI)
indicates that confidence in the South African property market improved by 2%,
to end 2020’s third quarter at 76%.

While understanding the overall confidence level of
consumers is important, Absa also measures various aspects of these confidence
levels referred to as ‘sub-indices’. In the report, sentiments about the
current timing for buying, selling, and investing in property is measured.

Key summary:

The report indicates that the market continues to garner positive
sentiment towards buying property (buying sub-index) with the current property
prices and interest rates being the prominent drivers for this sentiment.

Low property prices are still the number one driver for positive buying sentiment (38% of respondents cited prices as the driver of buying sentiment) with current interest rates the number two driver for buying sentiment (36% of respondents cited interest rates as the driver for positive buying sentiments). Interest rates moved from being the number seven driver in 2019’s fourth quarter (4% of respondents).

The five interest rate cuts this year, amounting to 3.00% (of
which 1.50% occurred in the second quarter of 2020 and 0.25% occurred in the
third quarter of 2020).

Covid-19-specific mentions continue to decline as a reason for low confidence in the property market while concerns about lacklustre economic performance in general, continues to increase.

Source: Propertywheel.co.za | https://propertywheel.co.za/2020/11/low-property-prices-number-one-driver-for-positive-buying-sentiment/

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