In a surprising turn of events, Johannesburg has emerged as the global leader in enhancing property affordability for its residents since 2018, according to a comprehensive study by UK-based Online Mortgage Advisor.
This groundbreaking research assessed the intricate balance between fluctuating house prices and the average incomes of full-time workers across 219 cities worldwide. The findings were astonishing as reported by Bizcommunity.
The analysis had two main objectives. Firstly, it aimed to identify cities where property affordability had significantly improved for citizens. Astonishingly, Johannesburg stood out as the clear winner in this category.
Secondly, the study delved into the issue of local workers being priced out of rental markets. Cape Town excelled in this regard, becoming the most affordable city for renters, with workers spending nearly 15% less on rent than 2018. While leading in property affordability, Johannesburg also demonstrated a 6.7% decrease in rental costs relative to income. In contrast, Port Elizabeth saw a troubling 22.6% increase in the portion of income spent on rent.
The study’s methodology was meticulous, relying on data from Numbeo for each city. It compared the average price per square meter of a city centre flat for property affordability to the average annual take-home wage in 2018 and 2022. For rental affordability, it analysed the average monthly take-home pay in each city against the average cost of renting a one-square-meter flat in the city centre to calculate the ratio change between 2018 and 2022.
This extensive research covered essential metrics, including the price of a one-bedroom flat in a city centre, average monthly post-tax wages, property purchase prices per square meter, and renting a one-bedroom flat in a city centre. It encompassed 219 cities for property purchasing power and 422 for rental data.
These results offer valuable insights into the complex relationship between property prices and incomes. Moreover, they highlight how cities like Johannesburg and Cape Town are actively working to make homeownership and rental housing more accessible to their residents, addressing a critical issue in today’s housing market.
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