Property prices in South Africa have continued to rise steadily, and data from 2024 indicates that homeownership remains a challenge for many. <\/p>\n\n\n\n
Despite below-inflation growth in property prices, South Africans need to earn more than R8,000 above the national average salary to afford an average house. <\/p>\n\n\n\n
The cost of housing is outpacing income growth, leaving many potential homeowners struggling to enter the market.<\/p>\n\n\n\n
According to the latest Residential Property Price Index (RPPI) for the first quarter of 2024, compiled by StatsSA, residential property prices have risen by 23.8% over the last five years. <\/p>\n\n\n\n
However, the increase has not been uniform across the country, with certain provinces experiencing higher property price growth than others. <\/p>\n\n\n\n
The RPPI tracks changes in property prices for various residential property types, such as houses, townhouses, and flats, all purchased by private individuals. <\/p>\n\n\n\n
The data is based on property transactions recorded by the Office of the Chief Registrar of Deeds.<\/p>\n\n\n\n
The RPPI not only offers a national perspective on property price trends but also breaks down the data at provincial and metropolitan levels. <\/p>\n\n\n\n
Over the five-year period from 2019 to 2024, the national average property price rose by 23.8%, which amounts to an annual increase of 4.8%. <\/p>\n\n\n\n
Leading the growth was the Western Cape, where property prices surged by 35.5% during this time. <\/p>\n\n\n\n
In contrast, the Northern Cape experienced a mere 0.9% increase, the slowest in the country, while Gauteng’s property prices grew by 16.4%, falling below the national average.<\/p>\n\n\n\n
However, simply looking at the rise in property prices does not give the full picture. When adjusted for inflation, property values nationwide have actually decreased by 3.9%. <\/p>\n\n\n\n
Inflation during the same period was recorded at 27.7%, meaning that in real terms, property values have dropped in most provinces. <\/p>\n\n\n\n
Only in the Western Cape, where prices increased by 7.8%, has there been any meaningful appreciation. In provinces like Mpumalanga, property values have remained stagnant since 2019, while in most other provinces, they have declined.<\/p>\n\n\n\n
Despite these inflation-adjusted losses, the average price of a house in South Africa still requires a salary that exceeds the national average for formally employed non-agricultural workers.<\/p>\n\n\n\n
How much you need to earn<\/strong><\/p>\n\n\n\n According to Richard Gray, CEO of Harcourts South Africa, banks typically prefer lending to buyers whose monthly bond repayments do not exceed 30% of their gross monthly income. <\/p>\n\n\n\n This threshold helps ensure that homebuyers can manage their bond repayments without compromising their overall financial well-being. <\/p>\n\n\n\n Sticking to this rule of thumb also leaves room for additional payments that can reduce the final cost of the home loan over time.<\/p>\n\n\n\n Using this 30% guideline, BusinessTech calculated how much one would need to earn to afford the average house in each province. <\/p>\n\n\n\n The calculations are based on a 20-year home loan at an interest rate of 11.75%, using Absa\u2019s bond calculator. <\/p>\n\n\n\n Property prices were sourced from Property24, which compiled data from over 190,000 property sales registered with the deeds office in 2024 so far.<\/p>\n\n\n\n The national average price for a home in South Africa is currently R972,200. <\/p>\n\n\n\n To afford a house at this price, an individual or household would need to earn roughly R35,120 per month. <\/p>\n\n\n\n This is R8,329 more than the average salary of R26,791 earned by formally employed non-agricultural workers in the country.<\/p>\n\n\n\n Unfortunately, this remains the case for all provinces, with the lowest average house price recorded in the Free State (R800,000). <\/p>\n\n\n\n This means you would need to earn R28,900 per month, which is still more than the average salary. <\/p>\n\n\n\n The salary requirement only increases from there, with the Western Cape being the most expensive province in the country. <\/p>\n\n\n\n The average price of homes in the Western Cape is R1.6 million, and a salary of just over R58,000 is required\u2014almost double that needed in most provinces.<\/p>\n\n\n\nProvince<\/th> No. of sales<\/th> Average house price<\/th> Salary needed
(per month)<\/th><\/tr><\/thead>Eastern Cape<\/td> 13,764<\/td> R860,000<\/td> R31,100<\/td><\/tr> Free State<\/td> 7,497<\/td> R800,000<\/td> R28,900<\/td><\/tr> Gauteng<\/td> 71,499<\/td> R900,000<\/td> R32,510<\/td><\/tr> KwaZulu Natal<\/td> 22,287<\/td> R1,050,000<\/td> R38,000<\/td><\/tr> Limpopo<\/td> 5,261<\/td> R940,000<\/td> R34,000<\/td><\/tr> Mpumalanga<\/td> 7,023<\/td> R950,000<\/td> R34,300<\/td><\/tr> Northern Cape<\/td> 3,157<\/td> R840,000<\/td> R30,300<\/td><\/tr> North West<\/td> 8,182<\/td> R800,000<\/td> R28,900<\/td><\/tr> Western Cape<\/td> 51,414<\/td> R1,610,000<\/td> R58,200<\/td><\/tr> National total\/average<\/strong><\/td> 190,084<\/strong><\/td> R972,200<\/strong><\/td> R35,120<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
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