The houses you can afford on the average salary in South Africa

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Currently, the average monthly salary in South Africa stands at R26,894. Based on the recommended bond threshold by banks, this allows an average earner to afford a home valued at between R700,000 and R1,400,000—depending on the number of earners per household.

According to the latest quarterly employment survey (QES) published by Stats SA, the average monthly earnings increased by 1.6% from R26,471 in August 2023 to R26,894 in November.

On a year-to-year basis, the average monthly earnings paid to employees in the formal non-agricultural sector increased by 2.3% from R26,298 in November 2022.

This was largely due to increases in industries such as trade, business services, manufacturing, construction, transport, mining, and electricity industries.

While defining who qualifies as ‘middle class’ is challenging in South Africa, Discovery Bank highlights in its SpendTrend 2024 report that mass affluent (middle-income) individuals are those who earn between R100,000 and R350,000 a year.

This works out to between R8,000 to R29,000 per month, which is in line with the South African Reserve Bank’s (SARB) estimated range of the South African middle class.

Averaging out the estimates presented by multiple sources, the middle class in South Africa can be regarded as those who earn an income of roughly just above R20,000 per month.

This would mean that the average formally employed non-agricultural worker in the country fits easily into the upper end of the middle-class category.

The houses you can afford

According to Richard Gray, CEO of Harcourts South Africa, banks clearly prefer lending to home buyers whose monthly bond cost is no more than 30% of their single or joint gross monthly income.

This 30% income threshold for home loans has been a common measure of loan affordability among South African banks.

For instance, institutions like SA Homeloans have stated that they will not approve a home loan if the repayments exceed this percentage of a borrower’s single or joint gross monthly income.

Gray emphasised that adhering to the 30% guideline ensures that home buyers maintain a balanced financial portfolio, allowing room for other expenses and savings.

Gray also noted that this threshold is important because it also leaves room for making additional monthly payments into a home loan account.

This can significantly reduce the final cost of the home loan and decrease the payment period.

Considering this, BusinessTech estimated the price of a property one or two individuals – assuming you have a partner – could afford on the average salary in South Africa.

To calculate this, we used Absa’s bond calculator, assuming a 20-year home loan period at an interest rate of 11.75%.

Based on these assumptions, the table below outlines the price and monthly bond repayment amount one or two individuals could afford on the average salary in South Africa.

No. of earners per household	Gross monthly income	Max. property value	Monthly repayment amount
One	R26 894	R745 000	R8 068
Two	R53 788	R1 490 000	R16 136

Using these figures, we then looked at various properties currently on the market at these price points in the Western Cape, Gauteng, and Kwa-Zulu Natal – to give you an idea of what you’d be looking at.

These property examples are listed below.

Western Cape

One income earner