What is the Minimum Salary to Buy a House in South Africa | A Complete Guide?
The heightened competition and interest rates have made it challenging for potential buyers to purchase a home. Anyhow, the first step to buying your dream house is having a clear idea about the minimum salary to buy a house in South Africa. For this, you either need some savings for a deposit or have enough salary to apply for a house loan or a government subsidy.
Have you been saving for some time and want to contact a broker/ bank yet don’t have any clue about the salary requirements? Give this guide a quick read.
What is the Minimum Salary to Buy a House in South Africa?
There is no specific answer to this question, and the minimum salary to buy a house in South Africa varies depending on your location, salary, credit score, budgeting, and deposit. In 2021, Lightstone conducted research revealing some stats about buying a house in South Africa. Here are a few key takeaways from the results of the research.
- The average property price in Gauteng is around R620,000, for which you should be earning around R20,600 per month.
- The average property price in the Western Cape is around R680,000, for which you should be earning around R22,600 per month.
- The average salary requirement to buy a house in the Western Cape is R12,600 per month.
What is the Minimum Salary Requirement to Buy a House in Big Cities of South Africa?
Research done by Lightstone Residential Property explores that location plays a significant role in determining the salary requirement for the purchase of the house. For instance, a luxury house in a secure neighborhood would cost you around R11,700,000, for which an average monthly salary should be R389,400.
Here is a breakdown of some popular cities and their respective salary requirements for the purchase of a South African house.
- In Cape Town, the average property price is around R6,400,000. For this, the monthly salary requirement is around R213,000.
- In Johannesburg, the average property price is around R9,850,000. For this, the monthly salary requirement is around R327,800.
- In Durban, the average property price is around R1,500,000. For this, the monthly salary requirement is around R49,900.
What is the Minimum Salary Requirement to Buy a House in South Africa with Savings?
If you have been saving for a house in South Africa and it is now the time to purchase it, you can do so by putting down the deposit. According to Ooba, you need to deposit anywhere between 10% and 20% of the actual home price. The remainder of the cost will be covered by your installments, which the lender himself determines.
How Much Do You Need to Earn to Qualify for a Home Loan in South Africa?
But if you do not have the money to cover the remainder of the cost in installments, a home loan from a bank may work for you. Though rarely, some first-time buyers also get a 100% home loan for anyone who does not even have the money for the deposit.
The average minimum take-home salary requirement to apply for a house loan in South Africa is anywhere from R12,542 to R22,600 per month. However, this amount is not specific and may vary depending on the province and city. If you have a salary within this range, all you need to do is apply for a loan, and the bank will make a decision based on the evaluation score.
- Note: Do consider that the bank may require a higher amount (even double) after evaluating a 20-year mortgage at the prime loan rate of 9%.
Can You Qualify for a Home Loan on a Single Income?
Well, there is a strong misconception that potential home buyers cannot qualify for a home loan on a single income, which is not entirely true. According to the CEO of RE/MAX in South Africa, over 40,000 single women and 35,000 single men purchased property after applying for a home loan. So, you should not be discouraged and apply for a home loan if you fulfill the prerequisites.
What is the Minimum Salary to Buy a House in South Africa with Government Grants?
Many first-time buyers wonder whether they can buy a house in South Africa with government-run initiatives. Well, yes, you can get a property with initiatives like the Finance Linked Individual Subsidy Programme, popularly known as FLISP. For this, the salary requirement to qualify for this small subsidy is anywhere between R3,501 and R22,000 every month.
What are Some Major South African Banks that Offer Mortgages to Foreigners?
All major banks in South Africa offer mortgages to citizens and foreigners with reasonable loans. Here are a few trusted alternatives for anyone who has no clue about where to start.
- Barclays Banking Group, under the Absa subsidiary, offers home loans.
- The Standard Bank of South Africa offers customized home loans for foreigners.
- FNB is by far the most popular choice for home loans among citizens and foreigners.
- Ooba is a broker scheme that offers special home loan services.
According to Ooba’s chairman, it is easier to buy a house in South Africa now than it was pre-Covid, all thanks to government schemes and house loans. All you need is a specific take-home salary to qualify for such schemes. I hope this guide has helped you successfully figure out how much you need to earn to afford a house in South Africa.
Article Modified on October 28, 2023. The data in this article is written and collected by multiple authors. Learn how we research on About Us.