Buying vs renting in South Africa – the winner is clear

Buying a home remains the preferred option for most South Africans, but affordability pressures and the flexibility offered by renting continue to shape property decisions across the country.

This is according to the latest Homeowners Sentiment Index (HSI) for the first quarter of 2026 from Absa, an indicator of the overall state of consumer confidence in South Africa’s property market.

The index revealed that, in Q1 2026, overall consumer confidence in South Africa’s property market increased by 1 percentage point to 88%, the highest level recorded since the Index was launched in 2015.

The increase continues the upward trend seen since 2024, pointing to sustained optimism in the country’s residential property market.

The overall score was supported by stronger sentiment across all categories within the HSI, with buying, selling, investing, and renovating all recording gains from the final quarter of 2025.

Selling sentiment saw the largest increase, by 4 percentage points, followed by buying and renovating sentiment, each at 3 percentage points.

Investment sentiment also rose by 2 percentage points. All subindices are now at their highest levels to date.

Absa Home Loans’ executive of strategy & strategic communication, Tshepo Mashashane, said the main driver of positive sentiment is that many South Africans believe property is a secure asset for investment.

“Homeownership is also an aspirational purchase for many South Africans entering the market for the first time, reflected in the high number of home loan applications from the first-time homebuyer segment.”

“Investors are also expected to play a key role in the market, driven by ongoing demand for rental properties.”

The developments in the Middle East had not affected homeowner sentiment at the time Absa’s survey was conducted.

“But only time will tell whether there is a delayed impact as the macroeconomic environment changes,” Mashashane said.

“Higher fuel prices and the effect this could have on inflation and the interest rate outlook may still influence sentiment in the months ahead.”

Buying vs renting

The index also compared how South Africans view buying and renting. It found that buying-versus-renting sentiment among potential future buyers currently renting remained steady at 77% compared to the previous quarter.

The report revealed that, despite ongoing economic uncertainty, many South Africans still view homeownership as an important long-term financial goal.

A significant number of respondents said they have now saved enough to afford a deposit on a home, while others indicated that they require larger living spaces, encouraging them to consider buying rather than renting.

According to the survey, 51% of respondents believe it is better to own property than rent, while 44% said people should buy rather than rent if they can afford to do so.

Many respondents also continue to view property ownership as a long-term investment opportunity. Around 40% believe property will accumulate in value over time, while 38% believe buying property to rent out can generate income.

The survey also found that 42% of respondents believe renting is ultimately more expensive than owning property.

However, while buying remains the preferred option overall, renting continues to appeal to many South Africans for practical and financial reasons.

The biggest driver behind positive rental sentiment was flexibility, with 48% of respondents saying renting requires less commitment and provides greater freedom.

Affordability also remains a major challenge for aspiring homeowners. Around 33% of respondents said they simply cannot afford to buy property right now.

In addition, 34% pointed to the added costs associated with homeownership, including maintenance expenses and transfer fees, which can make purchasing property significantly more expensive upfront.

The availability of rental properties also continues to support the rental market, with 24% of respondents saying there are many rental options available.

At the same time, 20% of respondents believe buying property is risky, reflecting concerns around economic uncertainty, interest rates and the financial responsibilities tied to homeownership.

The report noted that many South Africans who rented property over the past year did so because of affordability constraints, the need for temporary accommodation during renovations, or simply because they required personal space.

While the majority of South Africans still aspire to own homes, the data suggests that renting remains an important and attractive option for many households navigating an uncertain and fluctuating economic environment.