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Joburg becomes more affordable for buyers, Cape Town for renters
But the average worker in Cape Town still forked out a shocking 52% of their salary for rental accommodation in 2022.
All things are relative … based on Johannesburg’s average annual salary and average house price, its average worker could afford to buy a property just over 23sqm in size. Photo: iStock
Two of the country’s largest cities, Johannesburg and Cape Town, have made it onto an international list of cities in which it has become more affordable to rent or buy property.
According to a study by UK-based Online Mortgage Advisor, Johannesburg earned the number one spot in terms of becoming a more affordable city in which to buy property in 2022 than it was in 2018.
Affordability findings are based on each city’s average annual salary and average house price. The study found that the average Joburg worker could afford 23.2m2 of property in 2022 – 8.6m2 more than in 2018.
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Global scale of cities: Where Joburg and Cape Town feature
South Africa’s economic hub beat Canadian city Edmonton and Denver in the US, which came second and third respectively in the world ranking. For Edmonton, the average worker could afford 19.7m2, compared to 11.7m2 in 2018, while in Denver, workers could afford 5.2m2 more space than the 10.4m2 recorded in 2018.
Cape Town ranked 16th on the global scale of cities in which it had become more affordable to buy property in 2022, with the difference in space the average worker salary could afford only growing by 1.6m2 compared to 2018.
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Renting: Cape Town ‘more affordable’
However, for the average worker, Cape Town became the most “more affordable” South African city in which to rent property between 2018 and 2022.
According to the study, the ranking takes into account the proportion of a worker’s salary that goes towards rental costs.
In 2022, Cape Town rentals took a lower portion of salaries on average, but data shows that even with this, other cities still come up better for renting as they took a lesser percentage of workers’ salaries.
At least 52.68% of average salaries went towards rent in Cape Town in 2022; 14.85% lower than in 2018.
Pretoria and Johannesburg rentals in 2022 bit 22.58% and 27.88% of average salaries respectively in 2022.
Port Elizabeth in the Eastern Cape took top honours in SA in terms of becoming the least affordable place to rent in 2022, with rentals in the city reportedly claiming 47.98% of workers’ salaries – 22.6% more than in 2018.
This article is republished from Moneyweb under a Creative Commons licence. Read the original article.
