Price of a car and house in South Africa – 1994 vs 2024

In 1994, the cost of a house and a car in South Africa was vastly different from what it is in 2024, reflecting not just inflation but dramatic shifts in economic conditions.

A comparison by BusinessTech reveals just how steeply prices have increased over the last 30 years, with housing and vehicle costs far outpacing both inflation and salary growth.

In 1994, the average price of a house was R160,113, according to Absa’s house price data.

Adjusted for inflation, which has risen by approximately 422.5% over the period, the price of that same house today would theoretically be around R836,627.

However, the reality is much different.

According to the Oobarometer report for Q2 2024, the average house price has risen to R1,458,924.

This represents an 811% increase, far exceeding inflation by an additional 388.5%.

The housing market in South Africa has clearly undergone a massive transformation, with property prices increasing at a rate that surpasses the growth of average incomes.

On the other hand, finding average car price data for 1994 proved more difficult.

However, using archived data from Bestsellingcarsblog.com, which lists the top-selling models of that time—such as the Toyota Corolla, VW CitiGolf, and Mazda 323—the average price of these popular vehicles was approximately R46,477 in 1994.

When adjusted for inflation, this translates to around R242,852 in 2024 terms.

Despite this, data from WesBank shows that the average consumer spent R392,174 on a new car in the first quarter of 2024.

This indicates a 744% increase in car prices since 1994, once again significantly surpassing the inflation-adjusted price.

Comparing the rise in the cost of houses and cars to salary growth over the same period highlights a concerning trend.

In 1994, the average after-tax salary was R21,490 per annum or R1,790 per month, according to the World Wealth and Income Database.

By 2024, BankservAfrica data reveals that the average take-home pay is now R198,984 per annum, or R16,582 per month.

While this represents an 825% increase in salaries over 30 years, outpacing inflation, the growth is still nowhere near as significant as the increases in housing and car prices.

The disparity between salary growth and the price inflation of essential purchases like homes and vehicles is particularly worrying because it points to a growing gap between earnings and cost of living.

While salary increases have doubled inflation, they have not kept pace with the surging prices of goods that are integral to the average person’s quality of life.

Households today face significantly higher monthly costs than they did 30 years ago, creating financial strain for many South Africans.

For example, the costs of basic utilities have soared.

A study by PowerOptimal found that since 1996, water tariffs have surged by 2,100%, and electricity prices have climbed by 1,710%.

Both utilities have far outstripped inflation, with water prices rising nearly six times faster and electricity prices almost five times faster than inflation.

These rapidly increasing costs add further pressure to households already burdened by higher housing and car prices.

Moreover, the purchasing power of today’s average salary doesn’t stretch as far as it did in 1994.

Although salaries have technically kept pace with inflation, the quality of the goods purchased in 2024 has diminished. For instance, the Toyota Corolla, a top-selling vehicle in 1994, cost R51,039.

In 2024, the price of a new Corolla starts at R536,500—a staggering 951% increase. While salaries have grown by 825%, the price of the same car has risen by a much larger margin, making it less affordable for the average consumer.

The economic landscape in South Africa has changed drastically since 1994.

While salaries have grown, they have not kept up with the sharp increases in the cost of essential purchases such as homes, cars, and utilities.

This growing financial gap is putting more pressure on South African households, which now face significantly higher costs without a proportional rise in purchasing power.

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