The house and car you can afford on a police officer’s salary in South Africa

·28 Aug 2024

Police officers can afford a house worth between R765,000 and R3.3 million and cars worth between R220,000 and R1.1 million, depending on their position and experience.

The South African Police Service’s (SAPS) 2023 annual report reveals that there are approximately 179,502 employees within the department, including both active police officers and administrative staff.

This marks an increase of 4,272 employees compared to the previous year.

Of this total, 20,547 are commissioned officers, 123,896 are non-commissioned officers, and 34,226 are Public Service Act employees.

With this workforce, the police-to-population ratio in South Africa now stands at 1:417, slightly below the globally accepted benchmark of 1:450.

However, this ratio has worsened over the years. In 2014/15, the ratio was 1:358, indicating a steady decline in police coverage.

It’s important to note that this ratio is influenced by each country’s unique crime situation, and therefore, the 1:450 benchmark may not always be applicable.

SAPS employees work in various sectors, such as administration, visible policing, and crime intelligence. The average salary across all ranks is R450,000 per year or R37,500 per month.

Entry-level employees (levels 1-2) earn an average of R299,000 annually, while senior management and executive employees (levels 13-16) can earn up to R1.43 million per year.

Comparatively, the average SAPS officer earns more than the typical formally employed non-agricultural worker in South Africa, who earns R26,791 per month as of the first quarter of 2024.

This means that a police officer’s monthly salary is over R10,000, higher than the national average.

Based on these salary ranges, SAPS members can afford homes and vehicles within a wide price range.

Lower-ranking officers can typically afford houses worth R690,000 and vehicles costing around R221,000, while senior management and executives can afford homes up to R3.3 million and vehicles valued at R1.1 million, reflecting their higher earnings and status within the police service.

BusinessTech looked at examples of the houses and cars that can be afforded by the lowest, average, and highest-ranked SAPS members in South Africa.

Houses

According to Richard Gray, CEO of Harcourts South Africa, banks clearly prefer lending to home buyers whose monthly bond cost is no more than 30% of their single or joint gross monthly income.

This 30% income threshold for home loans has been a common measure of loan affordability among South African banks.

For instance, institutions like SA Homeloans have stated that they will not approve a home loan if the repayments exceed this percentage of a borrower’s single or joint gross monthly income.

Gray emphasised that adhering to the 30% guideline ensures that home buyers maintain a balanced financial portfolio, allowing room for other expenses and savings.

Gray also noted that this threshold is important because it also leaves room for additional monthly payments to be made into a home loan account.

This can reduce the final cost of the home loan and decrease the payment period.

Considering this, BusinessTech estimated the price of a property an individual could afford on the minimum, average, and maximum salary of a SAPS member in South Africa.

To calculate this, we used Absa’s bond calculator, assuming a 20-year home loan period at an interest rate of 11.75%.

Using these figures, we then looked at various properties currently on the market at these price points.

Salary band	Gross income (monthly)	Max. property value	Monthly repayment
Levels 1-2	R299,000 (R24,916)	R690,000	R7,474
Average	R450,000 (R37,500)	R1,035,000	R11,250
Levels 13-16	R1,431,000 (R119,250)	R3,300,000	R35,800

3 Bedroom house in Soweto – R650,320

1 Bedroom apartment in Waterfall – R1 million

3 Bedroom House in Broadacres – R3.2 million

Cars

Industry experts still recommend that prospective buyers shouldn’t spend more than a quarter (25%) of their monthly income on vehicle-related costs, including:

Vehicle instalments
Insurance premiums
Fuel costs

Below, BusinessTech, again, looked at what you can afford to buy on the minimum, average, and maximum salary of a SAPS member in South Africa, using the above assumption that people will not spend more than 20% of their gross monthly income on vehicle financing, as per expert recommendations.

The calculations were made using Wesbank’s repayments calculator and include the assumption of a 0% deposit for car financing. They also exclude any additional fees incurred during the loan’s inception into the calculation.

The cars are financed over five years (60 months) at an annual interest rate of 11.75%.

Using these figures, we then looked at various properties currently on the market at these price points.