South Africa tops global ranking as most affordable country for homebuyers

Euronews describes in its article that the affordability of housing relative to wages varies dramatically across the globe. 

A recent study compares property prices with the number of months of average salary required to afford them.

According to a recent report by BestBrokers.com, residents of Denmark need the least time to save for a home in Europe. The study analyzed house prices, average net monthly income, inflation, and "real" mortgage interest rates—rates adjusted for inflation—across 62 countries globally.

"Since prices and income vary significantly from one country to the next, the team at BestBrokers decided to examine the property market through how many months of salary it takes to buy a home in various European countries," the report states, noting that it excluded spending on food, accommodation, childcare, or other expenses, making the calculation theoretical.

Based on their findings, the average cost of a 100-square meter property in Denmark is equivalent to 114 net salaries, making the Nordic country the most affordable in Europe for purchasing a home.

However, when it comes to other factors, Denmark ranked as the most expensive country in the EU in 2023, with prices for goods and services 43 per cent higher than the EU average, according to Eurostat. Additionally, the country's annual average earnings were the seventh highest in Europe.

According to the report, Ireland and Sweden are the second and third most affordable countries in Europe, with 123 and 129 net salaries, respectively, required to buy a 100-square-meter home. This is roughly equivalent to 10 years' worth of annual salaries.

So, where in Europe would it take the longest to save for a house? The lowest rankings in Europe go to the Czech Republic and Slovakia. In Slovakia, the average price of a 100-square-meter home is 297 times the average salary, which would take nearly 25 years to earn. Even if someone saved half of their net income, they would still need 50 years of diligent saving to afford a family home.

South Africa is the most affordable country in the world for purchasing a home relative to wages, with people needing 71 times the average salary to buy a 100-square-meter property. The United States ranks second in this list, although property prices can vary significantly between states. The report found that, in the US, people need 76 average monthly wages to afford a home, which is roughly equivalent to six years of annual salaries.

At the bottom of the ranking is Nepal, where 684 salaries are required to buy a home, closely followed by Türkiye, where the figure is 631, equivalent to over 52 years of earnings.

By Naila Huseynova