Most affordable property in the world
International forex brokers, Best Brokers, recently analysed 62 countries' home affordability in terms of monthly income, determining that, in 2024, South Africa topped its list for the most affordable place to buy property in the world on an average income.
The figures show that a 100-square-metre home in South Africa costs 71 real monthly wages, which is “…equivalent to roughly six years of annual salaries and is the best result out of all the countries we looked at,” said its report. In comparison the US - in second place - is around 76 average monthly wages, which surprised the reviewers given the US’ status as a large, or rich, economy.
Quoting in US dollars, the organisation found that the price per square metre for affordable property translates into USD963. “South Africa tops the chart with a home price-to-income ratio of 6.22%, followed by the US with 6.50%, Bahrain with 8.34%, and Denmark with 9.91%.”
How it reached these figures, say the authors, was tricky. “For this analysis, the team at BestBrokers decided to look at only interest rates for mortgages where the rates are fixed for a minimum of five years. Of course, for some countries, this means 10, 15, or even 30-year fixed rates. For the majority of countries, official data from central banks or statistics agencies was available only as an average rate for all mortgages.
“We also looked at the interest rates on new offers, rather than rates on outstanding loans (with a few exceptions, once again since different countries and banks use different statistics). Variable (floating) interest rates were not included in the calculations due to the variance in the conditions offered by banks.”
We could actually say that for 2025, SA may do even better given that the interest rate dropped by 0,25 basis points both in January and in May, meaning that were the analysts to revise, SA would be even more ahead of the US which hasn’t yet cut its interest rate.
Leader in real estate anti-money laundering
Another list where SA leads the field is that it received the highest score among 24 countries, in an index that evaluates how well the real estate market is protected from illicit financial activities, particularly money laundering. Interestingly the US was one of the worst performers in position 22.
Transparency International, a global non-government organisation dedicated to combating corruption, and the Anti-Corruption Data Collective (ACDC), jointly developed the first Opacity in Real Estate Ownership (OREO) Index.
The OREO Index assesses the ideal framework to shield real estate markets from ‘dirty money’ using two pillars:
Availability and adequacy of real estate data. This pillar examines whether sufficient and reliable data about property ownership is accessible, which is crucial for tracking and preventing illicit transactions.
Coverage and scope of an anti-money laundering (AML) legal framework: This pillar evaluates the strength and comprehensiveness of laws and regulations designed to combat money laundering within the real estate sector.
The importance of this Index is underscored by South Africa's presence on the Financial Action Task Force's (FATF) grey list since 2023, after the FATF expressed concerns regarding the country's AML and counter-terrorist financing (CTF) measures.
Since then the country has worked with the FATF to actively address the deficiencies highlighted in 67 Recommended Actions. Only eight strategic deficiencies require further work, which gives the National Treasury hope that SA will be removed from the grey list in October this year.
Real estate was one of the sectors specifically targeted because transactions can easily be manipulated to launder money by concealing true ownership or the source of funds. Many real estate agents and professionals, according to the FATF, may not fully understand or properly implement AML and CTF measures.
South Africa is one of “only four countries that ensure real estate transactions are subject to scrutiny - at least on paper - by professionals who are sufficiently covered by AML regulations,” says Moonstone, a provider of business process outsourcing, regulatory compliance solutions, and educational programmes for the financial industry.
“South Africa’s centralised property register captures comprehensive records on real estate transactions, from date and price of purchase to historical ownership and purchase data. However, the register cannot be consulted for free and appears to accept applications for access from South African citizens only, creating a hurdle for those seeking to follow illicit wealth from other countries into South African real estate.”
Private Property commends the real estate sector for playing a crucial role in the country’s efforts toward removal from the FATF’s grey list and further advancing the country’s financial integrity.
