Cape Town may be the most expensive city in the country in which to buy or rent a home, but data reveals that, compared to average salaries, it actually has the most affordable rents for those living there.
Johannesburg is considered to be the most affordable city in the world in which to buy bigger homes, again based on the average salary of local employees versus average house prices from 2018 to 2022.
Cape Town was also found to have become more affordable to buy a home based on average salaries over the five-year period, but the size of home one can afford has not really grown by much.
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By comparing ever-fluctuating house prices and average salaries, a new study from UK-based Online Mortgage Advisor has investigated the cost of buying property for the average worker globally over the past few years, from 2018 to 2022.
The research analysed how many square metres of home the average full-time employee in 219 global cities could afford over the five-year period. It also calculated each city's average monthly net salary compared to the average rental cost of a one-bedroom apartment in the city centre to calculate its change in affordability during the same period.
Joburg is South Africa’s most affordable city to buy a home
The study found that Johannesburg property has become more affordable at the fastest rate for local residents worldwide since 2018, when the average worker could afford 14,6 square metres of property. In 2022, the average full-time employee could afford 23,2 square metres of property – an increase of 8,6 square metres.
The South African city is followed by Edmonton in Canada and Denver in the USA. Cape Town ranks 16th.
Property prices compared to average salaries: 2018 vs 2022
Cape Town is South Africa’s most affordable city to rent a home
The research also explored where South African workers are being priced out of their local rental markets the fastest by looking at how much property rents have outgrown local wages during the same time period.
While Johannesburg rents were found to have also become more affordable in relative terms from 2018 to 2022, the city of Cape Town is the most affordable.
The study found:
- Cape Town became most affordable for renters, as workers spent 14.85 percent less of their salary on rent compared to 2018
- In Johannesburg, residents spent 6.7 percent less of their salary on rental costs, meaning rent has become cheaper in relative terms
- Port Elizabeth performed the worst in the analysis as workers here now spend 22.6 percent more of their income on rent during the same period.
SA property rents compared to average salaries: 2018 vs 2022
* Survey data sourced from Online Mortgage Advisor
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