South Africa's most affordable housing options in the Western Cape, Gauteng, and KwaZulu-Natal

According to the banks' recommended bond level, an average earner may currently buy a home priced between R700,000 and R1,400,000, depending on the number of earners per household, with a monthly wage of R25,304.

According to Stats SA's most recent quarterly employment survey (QES), the average monthly wage in South Africa dropped from R26,002 to R25,304 over the previous quarter, a 2.7% decline.

The fall was brought on by a 4,0% drop in the total gross profits distributed to employees, from R864.2 billion in December 2022 to R830 billion in March 2023.

This was mostly brought on by declines in the trade, community services, manufacturing, construction, transportation, and electrical industries.

According to data released by The University of Cape Town's Liberty Institute of Strategic Marketing, a household in South Africa has to earn about R22,000 in order to be categorized as middle class.

Accordingly, the typical officially employed non-agricultural worker in the nation would fall within that class.

What you can afford to pay

According to Richard Gray, CEO of Harcourts South Africa, a clear preference among banks for lending to home buyers where the cost of the monthly bond is no more than 30% of your single or joint gross monthly income is a trend that underscores the financial caution of South African home buyers and banks alike.

According to institutions like SA Homeloans, they will not approve a home loan if the repayments exceed this percentage of a borrower's single or joint gross monthly income. "The 30% income threshold for home loans has been a common measure of loan affordability among South African banks," he said.

BusinessTech calculated the cost of a home that one or two people - assuming you have a spouse - could afford on the average South African salary.

We utilized the bond calculator provided by FNB to determine this, assuming a 20-year loan term at an interest rate of 11.75%.

The price and monthly bond payments amount that one or two people may afford based on the average South African earnings are shown in the table below.

In order to give you an idea of what you'd be looking at, we used these figures to look at several properties that are currently on the market in the Western Cape, Gauteng, and Kwa-Zulu Natal at these price points.

Here is a list of some examples of properties.

Western Cape

One income earner

Apartment for Sale in Wynberg
No. of Bedrooms: 2
Location: Wynberg
Property price: R700,000
Monthly repayment: R7,591

Two income earners

House for Sale in Broadlands Village
No. of Bedrooms: 3
Location: Strand
Property price: R1,379,000
Monthly repayment: R14,944

Gauteng

One income earner

Apartment / Flat for Sale in Kibler Park
No. of Bedrooms: 2
Location: Johannesburg
Property price: R700,000
Monthly repayment: R7,591

Two income earners

Bedroom House for Sale in Sundowner
No. of Bedrooms: 3
Location: Randburg
Property price: R1,395,000
Monthly repayment: R15,117

Kwa-Zulu Natal

One income earner

Apartment / Flat for Sale in Paradise Valley
No. of Bedrooms: 1.5
Location: Pinetown
Property price: R690,000
Monthly repayment: R7,477

Two income earners

Townhouse for Sale in Hillcrest Central
No. of Bedrooms: 3
Location: Durban
Property price: R1,350,000
Monthly repayment: R14,630

Source: https://businesstech.co.za/