In the wake of destruction caused by the COVID-19 pandemic, the price of some goods and services may have increased beyond what salaries in average South African households can now afford. Families are left wondering how the economic climate and the aftershock of the national lockdown might affect both their salaries as well as purchasing power.
Thousands of locals have already suffered under salary reductions and retrenchments. It appears that the cost of accommodation in the country’s major cities is still on the rise.
In May 2019, Adzuna, an online job aggregator, established that South Africans were spending roughly 28% of their salaries on rent. This year, after comparing average rental prices and wages of more than 100,000 online job listings, they were able to point out areas where it would be most cost-effective for South Africans to live and work.
According to the latest PayProp Rental Index (Q1 2020), rental growth stands at 3.2% year-on-year. South Africans already have to juggle price increases on everything from medical care to fuel and rent.
A comparison was drawn between the average salary and the average property value in each of the country’s main city centres. The findings were indicative of the fact that most households spend anything between 16% and 27% of their monthly income on rent.
Most affordable cities for South Africans to rent property
After looking at income and rental prices in 10 of the country’s major cities, the most affordable cities to rent in came out as Bloemfontein, Polokwane, Rustenburg, Nelspruit, and Pretoria.
|City||Average Rent||Average Salary||% of Salary Spent on Rent|
With more and more remote jobs in South Africa, where you stay is less and less connected to where you work. Even though salaries in Cape Town are higher, renters in the Western Cape fork out as much as 27% of their wages on rent every month.
On the opposite end of the scale, Cape Town is still the most expensive city for renting a property in the country, unchanged since May 2019. Capetonians spend an average of 27% of their salaries on rent every month if they choose to live just outside the city centre. Rental costs within the city’s centre are even more expensive and can easily demand up to 35% of a renter’s monthly earnings.
Rental cost breakdown by province
Rental costs vary tremendously from one city to another, as is evident in the case between Pretoria versus Johannesburg. But aside from price differences between one city and another, there is also a dramatic difference in the price families pay to rent property in one province compared to another.
|Province||Average Rent||Average Salary||% of Salary Spent on Rent|
The Western Cape and KwaZulu-Natal came in as the most expensive provinces for renters to settle in. On the other side of the scale, the North West province along with the Free State and the Eastern Cape were the most affordable provinces for renting a property in South Africa.
When considering where to rent property in South Africa, low rental prices should not be the only factor that South African families base their decisions on. It is also essential to consider how many jobs are on offer in the area you intend to live in and what the average salary demographics look like. The average salaries in areas like Polokwane and Rustenburg, for example, is affected by the mining and technical sectors, which pay higher than average wages. Still, not everyone will be able to secure employment in this field.
Cities like Nelspruit and Pretoria tend to provide excellent value for renters, offering enough job opportunities and rental costs at or below 20% of monthly earnings. Destinations like Cape Town will see renters forking out the most significant chunks of their earnings towards rent every month.
*Adzuna’s analysis was also compared to average property prices provided by Property24 and Numbeo*