Median income for first-time buyers is R30,600 per month in 2016, according to research by Standard Bank. This group of buyers falls within the Emerging Middle Income consumer segment, earning between R16,418 and R33,333 p/m.
As a whole, the Emerging Middle Income consumer market has an average income of R25,110 p/m in 2016.
“With the same spending patterns as an average household in the same income group, a household with income equivalent to that of a median first-time buyer (R30,600) is able to accumulate savings of R3,080 p/m, or approximately 10% of their income,” said Standard Bank economist Siphamandla Mkhwanazi. “We assume that this (would-be first-time buyer) household has been able to consistently maintain this savings rate prior to their making a mortgage application. Then, if the potential savings are put into a savings account at an interest rate of 6% p/a, it would take approximately 19 months to raise a deposit. Based on the same savings rate and corresponding income, we estimate that it would have taken 39 months to save a deposit at the peak of SBR’s Deposits Index in Q1 2009 at the height of the global financial crisis.
“At the trough in Q3 2013, just before SA entered into the current downward phase of the cycle in December 2013, it would have taken only two months.”