Western Cape homeowner confidence soars over Gauteng and KZN
Category Property Advice
The signs that the Western Cape property market remains the standard in terms of homeowner confidence are all there. From semigration to even reduced levels of loadshedding as compared to the rest of the nation, affluent homeowners flock to this corner of the country as confidence in the regions of KZN and Gauteng decreases.
This is according to a report from the Absa Homeowners Index which collates findings from 2022's second quarter. While the future remains uncertain, we believe it's likely to remain this way for some time to come. (See high-end homeowners are flocking to the Western Cape's Atlantic Seaboard)
The dip in Gauteng and KZN
The index findings show that homeowners' sentiment in Gauteng has dropped by 8%. 77% of homeowners are still relatively confident within the City of Gold, especially within the Northern Suburbs of Johannesburg. While the current index still remains relatively positive, the slump may continue into 2023. The dip in KZN has only seen a marginal decrease from 76% in Q1 to 75% in Q2.
Nationally, homeowner confidence has also decreased by 3 percentage points to 78%. Still relatively high in terms of confidence but increasing concerns about economic stability and erosion in buying power stifles investment. People may still see the long-term security of investing in property, but the fine line between choosing to buy and opting to rent is widening.
Buyers' sentiment in CT up
Despite both regional and national sentiment continuing to dip, the Western Cape remains the only province in the country that has seen an increase. The increase has steadily been on the rise and while it's not far off from the rest of the country, the significance in a 3-point increase during times of economic challenges cannot be understated.
The Western Cape remains in quite a unique position as it continues to attract the upper echelon of potential buyers who would previously be split between Johannesburg and Cape Town. Yet since the pandemic, the freedom to work from home and a short window of relatively low-interest rates presented the perfect opportunity for those to choose quality lifestyle changes over moving closer to work.
Inversely, a continued decline within the rest of the country's property sectors is seen particularly among non-homeowners and first-time buyers. With fewer buyers in the market, house price inflation will also continue to decline, and thus selling one's home has become less attractive in the medium term.
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Contact Hamiltons Property Portfolio if you are looking to buy or sell property near you.
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Author: Bryce Anderson