PROPERTY: Jo’burg and PE Most Affordable Cities for Homebuyers
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Port Elizabeth and Johannesburg currently appear to be the best SA cities in which to buy a home, according to the latest housing and salary statistics - for the simple reason that they offer the best affordability.
“And this does not mean that people here get paid the highest salaries,” says Hano Jacobs, CEO of the Realty 1 International Property Group, “only that these two cities offer the best balance between house prices and salaries.”
In Port Elizabeth, he points out, the average white collar salary is actually 16% lower than the national average of R19 293pm, according to top online placement company JobCrystal, which regularly surveys job candidates seeking to earn R150 000 a year or more.
However, according to the latest Absa Housing Review, the average price of a middle segment house (under R3,1m) in the Port Elizabeth/ Uitenhage Area is also 16% less than the national average of R1,021m - which means that the monthly home loan repayment on such a house would be equal to 43% of that salary*.
“In Johannesburg, white collar workers generally earn about 4% more than the national average,” Jacobs says, “but house prices are also somewhat higher than the average, and the bond repayment to salary ratio is once again 43%.”
The next best cities for homebuyers are Bloemfontein and Pretoria, where house prices are currently well ahead of the national average, but salaries have kept pace and the repayment ratio currently stands at 46%.
By contrast, he notes, a combination of lower-than-average salaries and much higher-than-average house prices in Cape Town mean that buyers in that city can expect to hand over 52% of their salary each month to cover the bond repayment on an average home.
In Durban, although house prices are still depressed, the average salary is still way below the national average, so the bond repayment to salary ratio is also high, at 48%.
“However, it is also worth noting that another JobCrystal survey recently found that employees are generally happier if they live in a smaller city rather than a major metro, and that Durban has the highest happiness rating of all SA cities, at 61% of employees.
“The Eastern Cape cities are next with 60%, followed by Pretoria (57%), northern Johannesburg (56%) and Cape Town (55%), and homebuyers may also want to take this factor into consideration before making any purchase decisions.”
Business News Sector Tags: Property|