Joburg tops for affordable homes
Johannesburg - Port Elizabeth and Johannesburg are the most affordable cities for home buyers, a property group said on Thursday.
"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," said Hano Jacobs, CEO of the Realty 1 International Property Group.
"And this does not mean that people here get paid the highest salaries, only that these two cities offer the best balance between house prices and salaries."
He said in Port Elizabeth the average white collar salary was 16% lower than the national average of R19 293 per month, according to online placement company JobCrystal.
The latest Absa Housing Review finds the average price of a middle segment house in the Port Elizabeth/Uitenhage Area was 16% less than the national average of R1.02m.
This means the monthly home loan repayment would be equal to 43% of that salary.
"In Johannesburg, white collar workers generally earn about 4% more than the national average, but house prices are also somewhat higher than the average, and the bond repayment to salary ratio is once again 43%."
Bloemfontein and Pretoria were considered the next best cities, with the repayment ratio at 46%.
Cape Town, however, fared less well.
"... 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."
Durban, with its depressed house prices and salaries below the national average, had a ratio of 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," he added.
The Eastern Cape cities followed at 60%, then Pretoria (57%), northern Johannesburg (56%) and Cape Town (55%).
Realty 1 based its home loan calculations on a deposit of 10% on a 20-year home loan, repayable at 9% interest per annum.