What sort of home can two average salaries buy in SA? It's more complicated than you think
Two average South African salaries could theoretically finance a R1.5 million home, but what the bank says a couple can afford and what they have left to live on are two very different numbers.
South Africans earning the average salary may seem on paper to be able to afford homes similar to the average purchase price, but qualifying for a bond and comfortably living within the budget are two different matters. The average South African salary is R21,642 per month, so two earners would have R43,284 to work with each month.
Based on this income and a 30% repayment-to-income ratio, banks could allow for a home loan repayment of up to R15,000 per month. At a 10.5% prime lending rate and a 20-year loan, this would support a bond around R1.5 million, which is near the average purchase price for first-time buyers. In major cities like Johannesburg, this amount could secure a three-bedroom apartment, townhouse, or house, while in Durban, it could buy a larger property.
However, this affordability comes with challenges. Homebuyers must factor in additional expenses like rates, taxes, utilities, groceries, transport, insurance, and medical costs, as well as potential deposits. The improved approval rates and rising house prices come with the caveat that real salaries remain lower than a year ago, and purchasing power is weaker.
Despite some positive indicators, the journey to homeownership remains complex for many South Africans.
Written by urgent.news from IOL's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
