Jo'burg properties are priciest

Johannesburg - Of the country's six largest metropolitan areas last year, house prices were the highest in the Johannesburg metro.

This area is the least affordable in terms of property, even though average annual household income is the highest in the country.

This has emerged from new research by First National Bank during the second quarter of this year, which extrapolated the affordability of houses in terms of how price related to household disposable income.

John Loos, a property analyst at FNB's home loan division, says although houses in the Cape metro are apparently the most expensive per square metre, the Metro is the third most affordable in the country in terms of property. Tshwane comes second.

He says it is important to calculate property affordability, rather than square metres, because one buys a property and not square metrage. He reckons one must also remember that the average size of erven in the Cape metro is less than that in Johannesburg, which indicates a greater scarcity of land in the Cape.

In the Johannesburg metro last year's average price of a home was, according to Loos?s calculations, R1 040 958, and the average annual household income R186 940, taken from Global Insight's figures. In the Nelson Mandela Bay metropolitan area the average 2008 house price was R624 895 and the average annual household income R149 579. The affordability ratio was therefore 4.18. In the Cape metro the average house price was R894 092 and household income R172 749, with an affordability ratio of 5.18.

Interestingly enough, says Loos, the Tshwane metro is the second-most affordable region in the country. The average house price was R781 125, with an average household income of R185 687, giving the region an affordability ratio of 4.21.

- Sake24.com