Why Are Houses Expensive In South Africa
The state of the real estate market is one of the best measures of a country’s economic health. After all, the global financial crisis of 2008–2009 was brought on by the US housing bubble’s deflation.
What does the current status of the South African real estate market tell us? Well, a FNB survey claims that there has been a decline in the price of homes in South Africa.
How much are house in South Africa?
In South Africa, where homeownership rates hover around 60%, house prices have remained comparatively constant. An entry-level property (80-140 sq m) costs on average ZAR 937,000 in the country, while the price of a medium-sized home is presently ZAR 1,255,000. For the second consecutive year, South Africa has decreased. According to Business Insider, as of June 2019, the annual growth rate of home prices was only 3.3%, lagging below the most recent CPI inflation rate of 4.5%.
Real estate prices have decreased by 1.2% as a result of this. Several reasons have been given for this, including:
Affordability
In essence, demand declines when housing costs are too high because consumers are priced out of the market. This is supported by the fact that affluent communities are more severely impacted by the deflation.
Political unpredictability
Despite the market-friendly nature of the previous election outcome, it will still take some time for the housing market to recover from the normal uncertainty that comes with an election, especially one in which
The importance of problems like land reform was raised.
financial downturn
Although this also has to do with affordability, the fact that the country is still emerging from a recession inevitably slows down market activity.
In which South African city is real estate the cheapest?
One of the cheapest places to purchase residential property is Port Elizabeth. Compared to a 29% increase in average earnings offered, prices for properties up for sale there increased by just 1.5%. On the other hand, according to Green, residential property is most expensive to purchase in Johannesburg and Cape Town.
What salary is required to own a home in South Africa?
The average cost of a home in the Western Cape is R1,778,806(the most costly of the provinces), therefore to obtain a property loan of this amount, you must make at least R54,000 per month.
How much money would it take to comfortably live in South Africa?
The average monthly wage for workers in South Africa is R23,982, or R287 784 annually, according to Statistics South Africa’s employment report for the fourth quarter of 2021. Accordingly, you will need a minimum of R5 755 680 (R287,784 times 20) to support a sustainable retirement.
