The just-released Absa Homeowner Sentiment Index for the third quarter of 2025 shows that despite slow economic growth and high unemployment, overall confidence in the property market remains high at 85%, only slightly down from 86% in the previous quarter.
Growth forecasts for 2025 as a whole are hovering at around 0,9%, but some forecasts suggest the potential to reach 1,3% if certain factors improve. Growth in the second quarter (0,8%) was certainly better than the first (0,1%) and mining, manufacturing and the trade sector have all experienced a significant expansion in recent months. For example, car sales in September were up 28% year on year, and at their highest level since October 2014, with 38 603 units sold.
The official unemployment rate currently stands at 33,2%, and this is keeping a lid on credit growth, even though the financial health of many households is improving. The household debt-to-income ratio is coming down and earnings showed year-on-year growth of 3,4% in the second quarter of this year, but figures from the Reserve Bank show that mortgage lending, especially, remains subdued. Outstanding mortgage balances are currently only growing at an annual rate of around 2%, indicating that consumers are reluctant to take on new large debts in an uncertain employment environment, so are now often waiting until they have sufficient cash to purchase major items, or at least put down a substantial deposit.
Nevertheless, the good news for homeowners and those currently selling their properties is that optimism about the long-term value of property remains strong and that South Africans continue to see it as one of the most stable and rewarding investments.
Read more: Good prospects for buy-to-let investors
The Absa survey shows that 75% of responses to the question “Are you currently confident about the property market in South Africa and is now an appropriate time to buy?”, were positive in the third quarter, up from 74% in Q2 and from 67% in third quarter of 2023, when the market was still heavily constrained by high inflation and high interest rates.
The main drivers of this positive sentiment were the belief that property is always a good investment (45%), the belief that property appreciates in value (41%); the belief that one can make a good profit from property (32%), the belief that prices will continue to increase (31%), the belief that there are bargains to be had (29%) and the belief that interest rates are at low levels (23%).
Buy-to-let property investors also continued to show confidence in the market in Q3 with positive sentiment at 84%, the second highest level since 2015. This indicates a strong belief that now is an opportune time to invest for future value and returns. Many respondents also cited the continued strong demand for rental properties and the potential of creating passive income from investment properties.
Meanwhile, among those who are currently renting, the appetite for buying and becoming a homeowner remained at 75% in Q3 from Q2, but was up from 69% in same period of 2023. Many survey respondents said that they were ready to buy because they had now saved enough to afford a deposit for a home, while others expressed the need for a larger living space.
The main drivers of positive sentiment in this sector are the belief that it is better to own than rent (40%), the belief that renting is more expensive in the long term (36%), the belief that property will appreciate in value (33%) and the belief that buying to let (investment) creates income (30%). It is also interesting to note that among those who still prefer renting, the main drivers remain flexibility and affordability.
