Low interest rates boosted the property market in the first quarter

THE ABSA HOMEOWNER Sentiment Index showed that confidence in the property market in the first three months of this year had remained in line with that of the last quarter of 2020, after the low interest rate cycle stimulated the market.

The bank said yesterday that the index had inched ahead by 1 percent to end the first quarter at 81 percent, the fourth consecutive quarter of sentiment improvement. Sentiment towards buying property had also improved for the fourth consecutive quarter to a level of 82 percent, the highest level of this sub-index since 2015, the bank said.

Sentiment towards buying rather than renting also reached the highest level of the index. Only 35 percent of respondents thought is was an appropriate time to sell their properties.

“An emerging theme has been observed in the survey – that of property renovations being leveraged to improve financial security. In this survey, 45 percent of respondents with a positive sentiment towards renovations indicated that alterations were also an opportunity to improve security.”

Sentiment towards buying property grew faster than sentiment towards selling property for the second consecutive quarter.

The rally due to the low interest rate cycle on sentiment towards buying property had given way to property accumulating in value. This could be indicative of the anticipated price increases because of the widening gap between willing buyers and willing sellers, Absa said in a statement yesterday.

Online bond originator MortgageMe said millennials, which account for almost 30 percent of the population, were making their mark on the residential property market. The average age of first-time bond applications was 36, and in 2020 and 2021 first-time buyers had made up the lion’s shares of bonded home loan applications.

Both here in South Africa and in other locations across the world, millennials showed a preference for living in neighbourhoods with a sense of community and easy access to lifestyle-related amenities, trendy restaurants and shops, which was why mixed-use developments were a popular choice among first-time buyers.