Affordability differs dramatically across South Africa. While many may aspire to live in premium suburbs, the truth is that the majority of people can’t afford such properties when entering the homeownership market for the first time.
The good news is that South Africa's housing market is, however, accessible for many first-time buyers. BetterBond's latest Property Brief shows that the average first-time buyer now purchases a home valued at around R1.4 million, while average monthly homebuyer income has climbed to R68,800.
Most home loan providers use around 30% of a buyer's gross monthly income as a general guideline for home loan repayments, while also considering net income, expenses and existing debt commitments. A larger deposit, a good to excellent credit record, and low to no debt commitments improve an applicant’s chances of approval and may even secure a more favourable interest rate.
That said, there are many attractive opportunities to buy residential property across every province. Consider:
Gauteng: Offers a wide range of affordable apartments, sectional title, and starter homes in areas such as Johannesburg South, the East Rand, Centurion, Pretoria North, and parts of the West Rand.
Western Cape: It may be that this region presents the country's most expensive residential market, but buyers can still find value in Kraaifontein, Eerste River, Blue Downs, Gordon's Bay, and parts of Somerset West.
KwaZulu-Natal: Here you’ll find comparatively affordable options in Amanzimtoti, Pinetown, Pietermaritzburg, Richards Bay, and several other growing North Coast developments aimed at younger buyers.
Eastern Cape: Attracts many first-time buyers in Gqeberha, Despatch, East London, and surrounding suburbs, where purchase prices remain competitive.
Free State: Here you’ll find many homes satisfying affordability, particularly in Bloemfontein, where buyers can enter the market well below the national average purchase price.
Mpumalanga: Opportunities are in Mbombela (Nelspruit), Secunda, and Middelburg.
Limpopo: Has a wide range of affordable housing in Polokwane and expanding regional towns.
North West: Potchefstroom, Rustenburg, and Klerksdorp are popular for first-time home buyers.
Northern Cape: A city like Kimberley still offers relatively accessible entry-level homes compared with many metropolitan areas.
What different home prices could cost
The examples in the table below exclude moving costs, municipal deposits, insurance, ongoing ownership maintenance, and other expenses but are based on:
- A 20-year home loan.
- Prime lending rate of approximately 10.5%.
- A 10% deposit.
- A gross salary guideline based on the home loan repayment being approximately 30% of gross monthly income.
- Transfer and legal costs are estimates and will vary according to the conveyancing attorney and lender.
| Purchase price | 10% deposit | Bond amount | Estimated monthly repayment | Recommended gross salary | Estimated upfront legal & transfer costs* |
|---|---|---|---|---|---|
| R750,000 | R75,000 | R675,000 | ±R6,740 | ±R22,500+ | R35,000–R45,000 |
| R1,000,000 | R100,000 | R900,000 | ±R8,985 | ±R30,000+ | R45,000–R60,000 |
| R1,250,000 | R125,000 | R1,125,000 | ±R11,230 | ±R37,500+ | R60,000–R75,000 |
| R1,500,000 | R150,000 | R1,350,000 | ±R13,480 | ±R45,000+ | R75,000–R90,000 |
| R2,000,000 | R200,000 | R1,800,000 | ±R17,970 | ±R60,000+ | R110,000–R140,000 |
Actual repayments will vary depending on the interest rate offered by the lender, but with a bigger deposit of 20%, you can reduce your monthly repayments quite significantly, as well as saving on the total interest you will pay over the life of the loan:
| Purchase price | 20% deposit | Bond amount | Estimated monthly repayment* | Recommended gross salary | Estimated upfront legal & transfer costs† |
|---|---|---|---|---|---|
| R750,000 | R150,000 | R600,000 | ±R5,990 | ±R20,000+ | R35,000–R45,000 |
| R1,000,000 | R200,000 | R800,000 | ±R7,990 | ±R26,700+ | R45,000–R60,000 |
| R1,250,000 | R250,000 | R1,000,000 | ±R9,985 | ±R33,300+ | R60,000–R75,000 |
| R1,500,000 | R300,000 | R1,200,000 | ±R11,980 | ±R40,000+ | R75,000–R90,000 |
| R2,000,000 | R400,000 | R1,600,000 | ±R15,975 | ±R53,300+ | R110,000–R140,000 |
Salary isn't everything
While income and deposit are important, they are only one part of a home loan provider’s affordability equation. They are also going to review your:
- Existing debt commitments.
- Credit score.
- Employment stability.
- Household expenses.
- Previous debt repayment behaviour.
Someone earning R45,000 a month with no debt and a 20% deposit may qualify more comfortably than someone earning R60,000 with vehicle finance and credit card debt.
Preparing to buy
Prospective buyers can strengthen their position long before submitting a home loan application by paying down short-term debt, maintaining a healthy credit score, saving for a large deposit, and obtaining pre-approval before beginning a property search.
South Africa's residential market continues to present opportunities for first-time purchasers who plan carefully and buy within their means. The key is understanding the full cost of homeownership - not just the monthly home loan repayment - and ensuring there is enough room in the household budget for emergencies.
Don’t deceive yourself into thinking that you can stretch yourself to buy a bigger house than you can afford, even if the banks approve that. The unknown future can be fraught with challenges, and if you don’t have room to buffer against financial burdens, you may find homeownership a difficult journey instead of the happy one it is supposed to be.
