By Alec Hogg
Having sold our Joburg property last year, I’m painfully aware of how property prices in SA’s commercial hub have fallen. Now comes confirmation that it’s worse than even I imagined: over the past five years, my long-time hometown has posted the biggest house price drop of 219 global cities surveyed by UK-based Online Mortgage Advisor.
To compare apples with apples, the researchers compared how many square metres a local could buy in a one-bedroom apartment with 2022 and 2018 average take-home pay. The table above shows the average Joburger’s salary bought 23.2 sq/m in 2022, up from 14.6 sq/m five years earlier — the most significant difference of any city surveyed.
___STEADY_PAYWALL___Put differently, in 2018, a 100 sq/m one-bedroom flat in Joburg cost 6.8 years of the average salary. Last year, that dropped to slightly over four years. By comparison, the same-sized apartment in Cape Town requires an outlay equivalent to 15 and a half years of the average salary.
Online Mortgage Advisor also compared rental data, using the cost per sq/m for 422 cities, including five in SA. The table below shows the results: Cape Town has far and away the most expensive rental accommodation of SA’s major Metros – with temporarily DA-run Gqeberha the surprise package.
An obvious conclusion: the market doesn’t lie – better governance translates into higher asset values. That’s one of many reasons why democracy works best when those who vote have a direct financial interest in the outcome. The bigger the middle class, the more rational an election’s outcome.
Sterkte
Alec
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