The houses you can afford on the average salary in South Africa right now
This year, prospective homebuyers in South Africa will need to be cautious of what they can afford in light of rising interest rates.
A bond is usually needed to finance a home in South Africa, with several things influencing how much of a bond a potential homeowner will be able to secure. Such factors include a person’s take-home pay and the size of their deposit.
According to the latest data from Stats SA’s quarterly employment survey (QES) for Q3 2022, the average salary in South Africa has increased slightly from the previous quarter to R24,813 per month, representing a 0.6% increase from R24,668.
This is also a 3.8% increase from the same period in 2021, when the average salary was R23,908 per month.
Currently, the average monthly take-home pay for those with formal employment is approximately R15,489 in nominal terms.
If you use the rule of thumb that your mortgage repayment should be approximately a third of your income, then with an average salary of R24,813 per month and a net income of R21,237, you could afford to pay around R8,271 per month towards your mortgage. This amount will vary based on your specific financial situation and the terms of your mortgage.
On 25 November, the South African Reserve Bank (SARB) pushed the interest rate up by another 75 basis points, taking the current prime lending rate to 10.50%.
By using both Old Mutual’s Personal Income Tax Calculator for 2022/23 and BetterBond’s affordability calculator, you can calculate how much the average South African working in the formal sector can afford.
Note: Calculations are based on a prime lending rate of 10.50% and assume that the bond repayment period is 20 year. Interest rates will vary, and so with the price of housing.
| Gross Income | Net income | Monthly repayment | Loan amount |
|---|---|---|---|
| R24 813 | R21 237 | R7 444 | R 745 598 |
If two people were living together and both were earning the same average salary, the household could afford a home of roughly R1,491,196.
Gauteng
2 Bedroom Apartment for Sale in Johannesburg – R755,000
2 Bedroom House for Sale in Johannesburg – R1,495,000
2 Bedroom Apartment for Sale in Pretoria – R760,000
2 Bedroom House for Sale in Pretoria – R1,410,000
Western Cape
0.5 Bedroom Apartment for Sale in Cape Town – R749,000
2 Bedroom House for Sale in Cape Town – R1,450,000
2 Bedroom Apartment for Sale in Stellenbosch – R750,000
3 Bedroom House for Sale in Stellenbosch – R1,500,000
KwaZulu-Natal
2 Bedroom Apartment for Sale in Durban – R750,000
2 Bedroom House for Sale in Durban – R1,495,000
2 Bedroom Apartment for Sale in Sea Park- R750,000
3 Bedroom House for Sale in KwaZulu-Natal – R1,500,000
Eastern Cape
2 Bedroom Apartment for Sale in Gqeberha – R745,000
2 Bedroom House for Sale in Lorraine, Gqeberha – R1,450,000
2 Bedroom Apartment for Sale in East London – R750,000
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