The latest Absa Homeowner Sentiment Index (HIS) survey shows that overall confidence in the real estate market is at a near-record high of 87% - and that this is especially evident in the rental sector, where 77% of respondents believe this is a good time to buy property and would like to acquire their own homes if possible.
The sub-index showed a 2% increase in the fourth quarter of 2025 compared to the previous quarter, and the main factors motivating this view are the belief that it is better to own than to rent if you can afford to do so, that renting is expensive and that property will increase in value so is a good investment.
Many respondents also said that it was now possible for them to buy because they had at last managed to save a big enough deposit, and this dovetails with recent reports from mortgage originators such as BetterBond that the number of home loan applications from first-time buyers has increased significantly in recent months.
However, affordability is still a serious barrier to ownership, with the HSI recording that 40% of tenants simply could not afford to purchase their own home at this time.
Meanwhile, the latest PayProp Rental Index shows that while rent-to-income ratios have remained stable at an average of 31,2%, tenants are also still spending an average 47,8% of their take-home pay on debt repayments, despite the interest rate cuts of the past two years. This leaves just 20% of their income available for spending on other essentials such as food, transport and education, and obviously makes it difficult for them to accumulate savings of any kind.
Rentals also showed above-inflation growth of 4,9% last year, to reach a national average of R9286 in the third quarter, so investors and landlords should be encouraged by the fact that the proportion of tenants in arrears remains at a low 17% - and that the average arrears amount is at a record low of 78% of one month’s rent. This indicates that tenants generally are less financially stressed, even if budgets are tight.
Consumers entering the rental market for the first time need to be aware, though, that the upfront costs of renting are increasing. While the average damage deposit ratio is currently stable at 1,31 times monthly rent, ongoing rental growth means the average deposit now amounts to more than R12 000.
