Property Sentiment Survey - JUNE 2020 This survey provides insight into how consumers are feeling about the property market in light of the ...
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Property
Sentiment
Survey
This survey provides insight into how
consumers are feeling about the property
market in light of the national lockdown.
JUNE 2020
privateproperty.co.za
Objective
The COVID-19 pandemic has swept through South Africa and the world, changing
everything about life and work as we know it. In order to curb the spread of the
virus, the South African government implemented a national lockdown which
imposed restrictions on most sectors of the economy. This created significant
challenges for businesses, and has had a direct impact on the lives and
livelihoods of consumers.
There have been many speculations about how the property market will react to
the lockdown.
The objective of this survey was to gain a deeper understanding of the impact of
the national lockdown on property market participants, including buyers, sellers,
landlords and tenants.
With this survey, we aimed to uncover the collective views of consumers so that
the prevailing sentiment in the property market can be made clear.
Survey method
To obtain a representative sample of the population, the survey was open to all
members of the public and targeted specifically at people who are currently
active in the property market.
While every effort was taken to ensure fair representation, due to the nature of the
survey being an online questionnaire, there is an inherent bias towards members
of the public who have access to the internet.
Respondents
The survey represents the perspectives of 5922
respondents, of which demographically there was a
higher female representation than males.
Demographically there was a
5922 higher female
respondents representation
took the survey. than males or other
gender identities.
1%
Female
GENDER 40% Male
DISTRIBUTION Other
59%
Figure 1: Gender
distribution of
respondents
While there is clearly a dominant female participation, an interesting insight
emerged when we examined gender distribution by age group.
The majority of female respondents fall within the 45 and below age group. This
indicates that females are getting into the property market at a much younger age
compared to their male counterparts (table 1).
Female Male Other
GENDER 18-24 67% 32% 1%
DISTRIBUTION 25-34 65% 34% 1%
BY AGE 35-44 58% 42% 0%
GROUP 45-54 55% 45% 0%
Table 1 55-64 54% 46% 0%
65+ 46% 53% 1%
The majority of respondents (69%) were below the age of 45. This is consistent
with what is already known about digital adoption, and a known inherent bias
introduced by the survey being conducted online. It is important to observe that
despite this demographic being the dominant presence in the digital space, their
interest in property is only evident from the late 20’s.
40%
35%
35%
30% 28%
AGE GROUP 25%
DISTRIBUTION 20% 15%
15% 10%
Figure 2: Age group 10% 6% 6%
distribution for
5%
respondents
0%
18-24 25-34 35-44 45-54 55-64 65+
Private Property Sentiment Survey 01
With respect to marital status, there is almost an even split between married and
single people who participated in the survey. Only 10% of the respondents
indicated being divorced or widowed (figure 3).
2%
8%
MARITAL Single
STATUS Married
43%
Figure 3: Marital Divorced
status distribution of
respondents Widowed
47%
Of the respondents, 43% indicated that they are single, 47% married, 8% divorced
and 2% widowed.
90% 9% 1%
MARITAL 18-24
STATUS FEMALE 25-34 65% 34% 1%
Figure 4: Marital status 35-44 41% 47% 11% 1%
of female respondents
45-54 27% 49% 19% 5%
Single Married
55-64 19% 52% 19% 10%
Divorced Widowed
65+ 8% 54% 17% 21%
Regarding males, the pattern below the age of 35 is similar to that of females, with
an indication that older respondents were married. 70% of male respondents over
the age of 35 indicated that they were married.
MARITAL 18-24 96% 4%
STATUS MALE 25-34 60% 39% 1%
Figure 5: Marital status 64%
35-44 30% 5% 1%
of male respondents
45-54 12% 75% 12% 1%
Single Married
55-64 8% 74% 15% 3%
Divorced Widowed
65+ 8% 78% 8% 6%
Private Property Sentiment Survey 02
In terms of property participants, 50% were in the market looking to buy property
(figure 6). This is positive news for the property industry as it indicates an
optimistic consumer outlook. It also shows resilience in the ‘desire to purchase’ of
consumers who have set this as a life goal, and this exceeds the negative
sentiment associated with the COVID-19 pandemic.
Only 12% of respondents indicated that they were selling their property. This
equates to 4 buyers for every seller, indicating buyer optimism and sellers
somewhat reluctance to sell.
20%
PARTICIPATION Buyers
ROLE Sellers
Figure 6: Breakdown 5922 50%
Landlords
of respondents by 18%
their role in the Tenants
property market
12%
Sellers
13%
20%
Upsizing
WHAT IS YOUR
REASON FOR Downsizing
SELLING? Relocating locally
26%
15%
Figure 7: Selling Relocating internationally
reasons
Other
26%
26% of sellers cited their reasons for selling as downsizing, while another 26%
indicated that they were selling because they were relocating within the country.
15% cited to be relocating abroad, and only 13% indicated that they were
upsizing. Other top reasons given are listed below.
What is important to note, is that there is little evidence of “market concerns” being
the major driver behind consumer behaviour, although this could be because the
survey was conducted in the earlier stages of the COVID-19 economic downturn.
Private Property Sentiment Survey 03
Other reasons for selling
• Investment reasons • Retirement
• Financial reasons • Divorce
• Tenant issues • Buyer’s remorse
• Selling a second property • Market concerns
22%
HOW URGENTLY
DO YOU NEED 32% Not urgent
TO SELL? Somewhat urgent
Figure 8: Selling Urgent
Timings
46%
Of all the sellers, only 22% indicated that they needed to sell urgently, while the
other 78% ranged from somewhat urgent (46%) to not urgent at all (32%).
Should the survey be conducted again in, for instance 90 days from now, response
to this question will be significantly different as the downturn associated with
COVID-19 begins to take its full effect.
WHERE IS YOUR 25% 23%
21%
20%
PROPERTY 15%
10% 10% 9%
LOCATED? 10% 8%
5% 5%
5% 4%
2% 2%
Figure 9: Property 0%
location (for sale)
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Of the top ten areas where sellers indicated their properties were located, 52% are
in 5 regions of Gauteng and of that, the highest proportion is in the Johannesburg
area with another 5% only stating the province as Gauteng. 12% of the properties
are in the Western Cape (Cape Town and Boland) and 10% in KZN (Durban and the
South Coast). The remaining 21% are located in 25 other regions throughout the
country.
Private Property Sentiment Survey 04Under 500k 2%
WHAT IS
21%
THE ASKING R500K - R1M
PRICE FOR R1M - R1.5M 17%
YOUR
R1.5M - R2M 17%
PROPERTY?
R2M - R3M 19%
Figure 10:
Property Asking R3M - R4M 11%
Price
(for sale) 13%
Above R4M
21% of the respondents have priced their property between R500k to R1m, while
50% of all respondents priced their property between R1m to R3m. The survey also
indicates a sizable number of properties in the market priced more than R3m.
AS A RESULT OF THE
24%
COVID19 LOCKDOWN
Remains
WHAT IS THE IMPACT unchanged
ON YOUR MOTIVATION 44% Still actively
marketing
TO SELL?
Reconsidering and
waiting until the imapct
of the pandemic
declines or stabilises
Figure 11: Covid-19 impact on
selling motivation (for sale) 32%
44% indicated that their motivations to sell has not changed, whilst a further 32%
indicated that they were still actively marketing their property even through the
lockdown. 24% indicated that they feel it is best to wait until the situation
stabilizes.
IF YOU WERE
MARKETING YOUR There has been less
interest in your property
PROPERTY BEFORE 32% There has been more
LOCKDOWN, WHAT interest in your property
IMPACT HAVE YOU 41% Interest hasn’t been
impacted at all
OBSERVED AS A RESULT You only began
marketing after
lockdown
OF THE LOCKDOWN?
10% Not applicable
Figure 12: Property advertising in
lockdown period (for sale) 9% 8%
Private Property Sentiment Survey 05As would have been anticipated, a significant portion of respondents (41%)
observed a decline in interest on their properties as a result of the national
lockdown, which is to be expected as there is restricted movement. For 9% of the
sellers, the lockdown did not have an impact on the observed interest in their
property, while 8% observed an increase in interest.
8%
WHAT DO YOU BELIEVE
YOUR PROSPECTS OF
Better than before
SELLING ARE
POST-LOCKDOWN?
Worse than before
39%
53% You are uncertain
Figure 13: Property selling
prospects post lockdown period
(for sale)
53% of sellers indicated uncertainty towards selling post the lockdown, while a
further 39% indicated that they thought their prospects of selling would be worse
post-lockdown than it was before the pandemic. Only 8% thought that their
prospects to sell post-lockdown would be better than they were prior. The overall
sentiment appears to be that of uncertainty and negative outlook towards selling
as a result of the coronavirus-imposed lockdown regulations.
Buyers
1%
7%
Real estate investor
HOW WOULD YOU BEST
28%
DEFINE YOUR ROLE IN First-time home buyer
THE PROPERTY MARKET? Repeat home buyer
Figure 14: Property buyer type Business Property acquisition
64%
64% of buyers who participated in the survey indicated that they were first-time
home buyers. 28% were repeat home buyers and 7% indicated that they were
buying for investment purposes.
Private Property Sentiment Survey 0614%
21%
WHAT TYPE OF SALE ARE In a deveopment
(new/off plan)
YOU LOOKING FOR? An existing
property
Figure 15: Property type
Bank repossession/
preference (buyers) Auction
65%
65% of the buyers indicated that they were looking to buy an existing property,
with 21% indicating an interest in buying property off plan. A further 14% indicated
that they were looking to buy bank-repossessed or auction properties.
5%
WHAT TYPE OF
PROPERTY ARE YOU Free Standing
33%
LOOKING TO BUY? Townhouse/
Complex
Figure 16: Property Requirement 62%
Other
for buyers
62% of the buyers are looking to buy a free-standing property while 33%
expressed an interest in more lock-up-and-go offerings such as townhouses or
properties in a complex.
23%
WHERE ARE 25%
20% 18%
YOU LOOKING 15% 12% 10% 10%
TO BUY? 10% 8% 8%
4%
5% 3%
2% 2%
Figure 17: Property 0%
Location preference
for buyers
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Private Property Sentiment Survey 0750% of all buyers are looking into properties that are located in Gauteng. 18% are
specifically interested in Johannesburg, 12% Cape Town, 10% East Rand, followed
by Durban and Pretoria both at 8%. Port Elizabeth and the Nelson Mandela Bay
area as well as the North West make up the remainder of the top 10 areas where
buyers are looking to buy. The remaining 23% of the buyers were looking in 24
other regions throughout the country.
Under 500k 19%
R500K - R1M 37%
WHAT IS
YOUR R1M - R1.5M 19%
PROPERTY 12%
R1.5M - R2M
BUDGET?
R2M - R2.5M 4%
Figure 18: Property
budget for buyers R2.5M - R3M 4%
Over R3M 5%
A significant proportion of buyers (56%), had a budget of under R1 million, with the
most popular price bracket being between R500 000 and R1 000 000.
20% 27%
HAS COVID-19 HAD No
AN IMPACT ON YOUR Yes
FINANCES?
Not likely to have an impact
Figure 19: Covid-19 impact on 19%
finances of the buyers Likely to have a negative impact
34%
34% of buyers indicated that COVID19 and the lockdown had directly impacted
their finances, while a further 20% expected the lockdown to have a negative
impact on their finances in future. The majority therefore were either already
affected negatively or were anticipating a looming negative impact on their
finances.
Private Property Sentiment Survey 08COVID-19'S LOCKDOWN 27% Made you reconsider
your decision to
AND RESULTING 40%
purchase property
Put you in a holding
ECONOMIC IMPACT HAS: pattern until the market
settles or stailises
Excited you about the
Figure 20: Covid-19 impact on the future of the property
market
buying decision
33%
A positive finding is the proportion of buyers that are excited about the future of
the property market. 40% of buyers indicated that they were excited about the
prospects of buying property post-lockdown, while only 27% are reconsidering
buying property altogether, potentially as a result of the financial impact of
COVID-19 on their finances. The remainder of buyers (33%) will wait until the market
settles down before buying.
YOUR CURRENT 31% Now is the time to buy
ATTITUDE TOWARDS 37%
You are concerned
BUYING PROPERTY IS: about being able to
afford the costs involved
Figure 21: Overall attitude towards To wait a little before
making a decision
buying in these times of Covid-19
32%
Almost a third of buyers (31%) are concerned about their ability to afford the costs
associated with purchasing a property. 32% are willing to wait a bit before
committing to a big decision of buying property.
The sentiment of most prospective buyers (37%) is one of optimism, largely due to
market conditions that would benefit the buyers. People are anticipating that
post-lockdown, they may be able to secure properties at a bargain while the
interest rates are also quite favourable.
Private Property Sentiment Survey 09Tenants
2%
FOR WHAT PURPOSES
ARE YOU RENTING OR Residential Purposes
(to live in)
PLANNING TO RENT A
For commercial
PROPERTY? (business requirements)
Figure 22: Tenants profile
98%
98% of tenants who participated in the survey were renting for
residential purposes.
WHERE ARE YOU 25% 22%
20%
CURRENTLY 15%
14% 16%
11% 10%
RENTING? 10% 9% 8%
5% 4% 3% 3% 2%
Figure 23: Tenants 0%
location
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22% of tenants were in the Johannesburg region followed by Cape Town (14%).
57% of all tenants were in Gauteng, 17% in the Western Cape, 8% in Durban and
almost 3% in Port Elizabeth and Nelson Mandela Bay. The remaining 16% of the
tenants were in 21 other regions throughout the country.
WHAT IS Less than R5000 29%
YOUR R5000 - R7500 35%
MONTHLY
R7500 - R10 000 18%
RENTAL
BUDGET? R10 000 - R15 000 11%
Figure 24: Tenants R15 000 - R20 000 4%
Budget
Above R20 000 2%
Private Property Sentiment Survey 1064% indicated that they were paying R7500 or less in rental per month. About 18%
indicated rental affordability of R7500 to R10 000, and only 6% of participants
indicated a rental budget of more than R15 000.
14% 19%
HAS COVID-19
No
LOCKDOWN
12%
IMPACTED YOUR Yes
FINANCES? Not likely to have an impact
Figure 25: Covid-19 impact on Likely to have a negative impact
tenant finances
55%
Many of the tenants (approximately 55%) indicated that their finances were
impacted by the lockdown, while another 14% indicated that they anticipated a
negative impact. With this high percentage of disruption in the finances of those in
the rental space, it is likely that evictions will increase over the coming months.
13%
30%
COVID-19 AND THE Not changed your
property needs
LOCKDOWN HAVE: Forced you to consider
moving to a more
affordable property
Figure 26: Change in tenant
Caused you to
property needs due to Covid-19 consider entering the
buyer’s market
57%
The majority of tenants (57%), indicated that as a direct impact of the lockdown
on their finances, they were considering moving to a more affordable property.
13% indicated that the lockdown has prompted them to consider buying property.
This may be due to interest rates being low and therefore making buying a more
affordable option than renting. This is likely to increase the number of people
looking to purchase property at a bargain.
The overall sentiment for tenants is that of a negative outlook. With tenants’
finances being impacted and concern over their ability to honour their monthly
rental agreement with their landlords, the fear of losing their home has become a
very real possibility.
Private Property Sentiment Survey 11Landlords
30% 26%
WHERE IS YOUR 25%
20%
PROPERTY 13% 13% 13%
15%
11%
LOCATED? 10% 7%
6%
4% 3%
5% 2% 2%
Figure 27: Property 0%
location for Landlords
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26% of all landlords indicated that their properties were in Johannesburg and
another 38% in Gauteng, which brings the tally to 64% of all landlords who
participated in our survey being in Gauteng. 15% were located in the Western
Cape, with 13% located in Cape Town and 2% in Boland. 6% had properties in
Durban and 2% in Port Elizabeth and Nelson Mandela Bay. The remaining 13%
indicated 24 other regions throughout the country.
Less than R5000 11%
WHAT IS THE
R5000 - R7500 36%
AMOUNT OF
RENTAL INCOME R7500 - R10 000 23%
THAT YOU RECEIVE
R10 000 - R15 000 16%
PER MONTH?
R15 000 - R20 000 8%
Figure 28: Rental income
for Landlords 6%
Above R20 000
While 64% of tenants indicated that their monthly rental budget was up to R7500,
only 47% of landlords had properties that meet this criteria. 53% of the landlords
indicated that they were letting out their properties for above R7500 per month.
This implies that there are some tenants who have had their finances strained by
rent even prior to the lockdown, as they would have found themselves in a
position where the rental amount was already more than their initial budget.
Private Property Sentiment Survey 12HAS COVID-19 24%
Yes - my tenant can no longer
LOCKDOWN HAD AN 33% afford the full amount
IMPACT ON YOUR
Yes - you are considering selling
TENANT? Yes - your tenant is unable to
pay rental at all
Figure 29: Lockdown impact No - you are currently receiving
your rent in full
on tenants for Landlords
33% 10%
33% of landlords indicated that the impact on their rental income has been a total
loss, while another 33% indicated that they did not receive the full monthly rental
income from their tenants as a result of the lockdown. In total, 66% of the landlords
indicated a negative impact on their rental income. 10% of landlords indicated that
due to the difficulties they were experiencing as a result of COVID-19, they were
considering selling their rental property. Only 24% of the landlords had tenants that
were still in good standing and paying their monthly rental in full.
IF YOU BEGAN
MARKETING YOUR There has been less
interest in your property
PROPERTY BEFORE 32% There has been more
THE LOCKDOWN, interest in your property
PLEASE SELECT THE 43% Interest hasn’t changed
at all
MOST APPROPRIATE Your marketing efforts
only started after
OPTION BELOW: 6% lockdown level 5
Not applicable
Figure 30: Rental property 7%
marketing for Landlords 12%
Putting aside those that indicated “not applicable” to this question, a large
proportion (32%) of landlords indicated that their properties have received less
interest as a result of the lockdown compared to the 7% whose properties
received the same amount of interest during the lockdown as it did prior.
6% reported more interest in their properties post-lockdown than prior.
Private Property Sentiment Survey 13WHICH OF THE
FOLLOWING STATEMENTS 12%
BEST DESCRIBE YOUR You will find a tenant
quicker after the
FEELINGS ABOUT THE 41% lockdown than before
It will be more difficult
PROSPECT OF SECURING
to secure a tenant after
the lockdown
A TENANT POST You are uncertain and
prefer to judge market
conditions at a later
LOCKDOWN: date
47%
Figure 31: Prospects of securing a
tenant post lockdown by Landlords
Only 12% of landlords indicated optimism at the prospects of securing a tenant
quicker post-lockdown than they would have before. The other 88% remain
cautious and pessimistic.The overall sentiment for landlords has been that of
pessimism. With the amount of people defaulting on rent increasing as a result of
the lockdown, landlords have been losing income derived from their properties. For
some, this also means that they now must pay the bond on those properties out
of pocket leading to more financial distress.
Conclusion
Below are the key conclusions on the consumer sentiments within the property
market.
BUYERS
• Buyers are looking for properties and are upbeat
about their prospect of owning a home.
• The interest rate in South Africa is at all time low,
and this will benefit most prospective buyers.
• 75% of the buyers can afford properties
priced under R1.5m.
• They are looking for established houses (full title)
in existing suburbs.
• They are aware of the COVID-19 impact on their
finances, yet this hasn’t deterred their resolve
to remain optimistic about property as a
worthwhile investment.
• They are prepared to wait a little while to see what
comes of the post-COVID-19 economic climate
• More work needs to be done in educating them
about the associated costs and the step-by-step
transactional process.
Private Property Sentiment Survey 14TENANTS
• 82% of respondents are looking to rent for under R10 000 per month.
• This group shows early signs of the uncertainty of consumers to afford their
current lifestyle with many of them citing the changing economic climate as the
driver for them having to seek a new place to live.
LANDLORDS
• Concerned about defaulting tenants. These respondents have taken advantage
of the “debt relief” package afforded to them by their home loan provider.
• The difficulty they face currently, is that the current COVID-19 legislation provides
protection against the Landlord evicting any defaulting tenant. The change
in sentiment of this group will likely see them moving towards needing legal
advice and wanting to engage easily with legal service providers who can walk
them through the steps to evict tenants legally once the ban is lifted on the
rules currently in place.
SELLERS
• Earmarked by a sense of negativity as highlighted in their reasons for selling,
there are a number of sellers indicating that they are leaving the country to
relocate internationally.
• The fact that many of them are not showing a heightened sense of urgency to
sell is reflected in the fact that they are likely to have been marketing their
property prior to the lockdown, and thus represent people moving through a
normal cyclical change of downscaling due to a change in life stage.
The sentiment of this group will be interesting to monitor over time considering
that the longer it takes for them to sell, the more likely a sense of heightened
urgency will result.
This survey forms the basis of Private Property’s
first Property Perspectives Report - an
insights-driven report that combines the collective
views, experiences and aspirations of all players
in the property sector with the aim of informing,
inspiring innovation, and empowering the real
estate industry with greater perspective into the
sentiments of the property market.
We hope you found the report insightful. Please
share your feedback with us here.
Private Property Sentiment Survey 15Property Sentiment Survey June 2020
Customer Support Centre 087 351 1166
Real Estate Support Centre 087 375 1000
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Published by Private Property SA (Pty) Ltd
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Suite 301, Beacon Rock, 21 Lighthouse Rd, Umhlanga Rocks, Durban, 4320
Disclaimer | Private Property SA (Pty) Ltd has taken every possible precaution to ensure the accuracy of the information and does not accept any
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