There’s a saying that goes, “It’s only a bargain if you can afford it.” There is also an ongoing debate about property prices, especially residential property prices. According to Absa, house prices have declined by 10.5% in real terms since August 2007.
This information probably got your attention – you’re no doubt expecting to read about the possible residential property ‘bargains’ up for grabs. The reality, however, is that it’s not about the price of the house, but rather about whether the South African public can actually afford to pay for it.
The fact that salaries haven’t increased by much more than inflation since 2007 may mean that young South Africans will take much longer before they can afford to purchase their first properties. When they finally can afford it, the debt ratio will be so high that they will have much less money to save.