Local economist not surprised Pretoria named world’s most affordable capital
“The rand is the weakest that it has been in a long time so that’s why we’re seeing this trend,” Dawie Roodt says.
It was no surprise that Pretoria has been named the most affordable capital city in the world by an overseas financial services firm, according to local economist Dawie Roodt.
He, however, cautioned that this doesn’t mean that the country’s economy is necessarily doing well or growing.
PRETORIA NAMED THE MOST AFFORDABLE CAPITAL CITY
The city was named the most affordable capital city by US financial services firm NetCredit.
According to a recent statement, the firm analysed more than 800 000 property listings for 73 global capitals and calculated the median house price for each.
Roodt said the findings of the study have mostly to do with the weakening rand.
“The rand is the weakest that it has been in a long time which is why we’re seeing this trend,” he explained.
“This can be explained with the Big Mac Index. A Big Mac will cost you more or less the same in any part of the world, but if you go to a McDonald’s in New York City, it’s going to be a lot more than one here because of the weakening rand.”
CALCULATE THE AFFORDABILITY OF PRETORIA
To calculate the affordability of capital cities, NetCredit used the average monthly net salary for each city to calculate affordability, and Pretoria came out tops.
“This explains, in part, why residential property in the Jacaranda City has been going through a bit of a purple patch,” said Carl Coetzee, CEO of BetterBond.
“Understandably, its popularity has driven up house prices within the greater Pretoria area.
“But we saw an increase of more than 13% in average house prices last year.
“Happily, it remains one of the most accessible South African cities for buyers across all price bands.
“This is largely because it offers a wide selection of property types, including security complexes and estates.
PRETORIA BOASTS HIGHLY DESIRABLE LEISURE AND LIFESTYLE OPTIONS
Coetzee added Pretoria boasts highly desirable leisure and lifestyle options, outstanding medical facilities and excellent schools. He added it has great universities like the University of Pretoria, the University of South Africa and the Tshwane University of Technology.”
According to a press release, Pretoria also appeals to young homebuyers, which bodes well in terms of future-proofing the city’s residential property market.
“Property24 reports that buyers in the 18-35 age group account for nearly one-third (30%) of all homebuyers in Pretoria.
“Many of these will be first-time buyers and it’s always good to see them getting a foot on the property ladder.
“BetterBond regional data shows that the average purchase price for first-time buyers in the Greater Pretoria area was almost R1.4-million for the 12 months ending April 2023,” said Coetzee.
36-49 AGE GROUP ACCOUNTED FOR JUST OVER 38% OF HOMEBUYERS
According to Property 24, the 36-49 age group accounted for just over 38% of homebuyers in the past year.
This suggests that the city is also popular with families wanting to be close to schools and educational opportunities.
“If we look at all buyers who applied for a bond with BetterBond for the past 12 months, the average purchase price in the greater Pretoria area was R1.66-million,” said Coetzee.
“Many new developments and apartment complexes are coming to market to meet local buyers’ needs.
“In 2021, Lightstone already reported that Pretoria had one of the highest percentages of sectional title sales of all South African metros.”
To many, Pretoria also appeals because it offers a slower pace of living compared with Johannesburg, while still providing plenty by way of arts and culture, leisure and entertainment.
Its location also makes it easy to get away for holidays or short breaks to the Bushveld, Lowveld, KZN, or any of several neighbouring countries. Pretoria has it all.
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