What property South Africans can get with a salary of R60,000 a month

·28 May 2023

Despite major interest rate hikes and a difficult economic environment, property demand for high-earners in South Africa remains relatively stable.

FNB’s latest property barometer for April 2023 said that market activity continues to decline due to high borrowing costs and weakening consumer fundamentals.

Overall, the year-to-date internal mortgage applications, an indicator of market demand, dropped by 13.1% compared to the same period last year.

This differs significantly based on income level, with certain groups more “interest-rate sensitive.”

In the “lower” income level, for those who earn less than R450,000 per annum, property demand dropped by 23.4% year-to-date.

A year-to-date 12.06% decline was recorded for the “middle” income band, where yearly earnings total between R450,000 and R750,000.

However, the demand for those earning R750,000 or more per annum was only 1% less than the previous year.

FNB said that reflects the disproportionate impact of higher borrowing costs across income groups.

For lower to middle-income earners, interest rates have a large and fast impact on mortgage demand, unlike the smaller and delayed response across upper-income segments.

That being said, other areas, particularly depressed sentiment, do still present downside risks to activity in the upper segments.

Overall, FNB said that the deleveraging trend on asset-backed credit is being driven by lower- and middle-income earners, highlighting the deterioration in affordability across the income spectrum.

However, with relatively stable demand levels amongst higher earners, BusinessTech decided to look at the cheapest properties available in the income bracket.

According to the oobahomeloan bond calculator, a 30-year mortgage with an 11.75% interest rate for a person who earns R750,000 per year – R62,500 per month – is roughly R1,850,000 – depending on their monthly expenses.

Below are some properties across South Africa that are worth R1,850,000.