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Cape Town - The belief that property still increases in value and is a good investment is one of the main reasons why South Africans are currently still in favour of buying residential property.
A quarter of the respondents to the latest Absa Homeowner Sentiment Index (HSI) for the first quarter of 2018 - released on Monday - felt property is still a value investment.
Almost 20% of the respondents regarded SA residential property prices as still relatively low, while 11% of the respondents listed low interest rates as a determinant for buying property.
On the other hand, the index shows that the positive sentiment about selling property improved further to 46% in the first quarter of the year from 41% in the final quarter of last year. This was after it reached a low of 34% in the second quarter of 2017.
The main reasons for selling property as indicated by respondents in the latest index were that property prices are relatively high and one could get a good price when selling (38%); the fact that many people want to own property and would be looking to buy (10%); and the strong rand exchange rate (6%).
Land issue weighs on property investment
A total of 81% of respondents were positive about property as an investment in the first quarter of 2018. This is down from 83% in the fourth quarter of last year. The main reason given by respondents was uncertainty about land expropriation without compensation.
The biggest reasons given for regarding it as a good time to invest in property were that it remains a good investment (23%); that it still gains in value (15%); and that there are bargains in the market (13%).
Renovating property
In the first quarter 79% of respondents were positive that now is a good time to renovate or do alterations to a property. The main reasons given were that renovation increases the value of a property (37%); that constant upgrading is important, especially if one wants to sell (11%); and that it is a good time to renovate property (10%).
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