• Monday, May 27, 2024
businessday logo

BusinessDay

Lagos leads: 5 African cities with the least affordable real estate in 2024

Top African cities with financially stable residents in 2024

Real estate has been a cornerstone of human civilisation since ancient times, providing shelter, security, and wealth. From the grandeur of Egyptian palaces to the humblest of homes, property ownership has long been a symbol of prosperity and status. However, the rising tide of real estate prices in modern Africa has created a stark divide between the haves and have-nots. As the wealthy few reap the benefits of investment and property ownership, many are left struggling to attain the basic human need of shelter.

This growing chasm of wealth disparity intensifies social inequality and makes it harder for disadvantaged groups to improve their economic situation and access opportunities. Moreover, the pursuit of profit by developers and investors leads to the displacement and forced evictions of vulnerable populations, such as low-income families and informal settlers. Urban renewal efforts frequently lead to the displacement of entire communities, as property renovations drive up prices, rendering homes unaffordable for residents and leaving them without shelter, ultimately disenfranchising them.

The top 5 African cities with the least affordable real estate in 2024 are based on Numbeo’s “Property Price to Income Ratio”. This list highlights cities where real estate is least affordable to the local population, rather than simply showcasing the most expensive cities. The Price-to-Income Ratio is an indicator of affordability, with a lower ratio signifying greater affordability.

Read also: 5 African cities with the most financially stable people in 2024

Lagos, Nigeria – 19.2

In Lagos, Nigeria, the Property Price-to-Income Ratio of 19.2 reveals crucial information about housing affordability. Computed as the ratio of median apartment costs to median family disposable income, this figure signifies that the median apartment price in Lagos is approximately 19.2 times the median annual disposable income of families in the city.

In practical terms, this suggests that the typical household in Lagos would need nearly 19.2 years of their disposable income to afford the median-priced apartment.

Cairo, Egypt – 18.4

Households in Cairo would require nearly 18.4 years of their disposable income to afford the median-priced apartment. This means that families in Cairo face a big challenge when it comes to finding affordable housing. They have to spend a lot of their money for almost two decades just to pay for a place to live, which can make it hard for them to manage their finances and live comfortably.

Read also: 7 things Nigerians stopped eating because they became too costly

Nairobi, Kenya – 11.5

In Nairobi, households are confronted with the task of needing approximately 11.5 years’ worth of their disposable income to afford the median-priced apartment. This insight, stemming from the Property Price-to-Income Ratio of 11.5, underscores the significant gap between housing costs and household earnings in the city. It highlights the enduring struggle for many residents to secure affordable housing, as they grapple with dedicating a substantial portion of their income over more than a decade merely to obtain a place to live.

Cape Town, South Africa – 5.4

Ranked as the fourth highest, households in Cape Town would need around 5.4 years of their disposable income to afford the average-priced apartment. Despite this ratio, which is higher compared to other cities, Cape Town still presents relatively balanced housing costs. Residents here may find it relatively easier to access affordable housing options compared to those in cities with even higher property price ratios. This nuanced perspective highlights Cape Town’s position as a housing market with some affordability challenges, yet still offering residents a degree of financial flexibility in managing housing expenses.

Durban, South Africa – 4.2

Households in Durban are faced with the task of needing around 4.2 years’ worth of their disposable income to afford the median-priced apartment. It suggests that residents in Durban may find it easier to secure housing compared to counterparts in cities with higher property price ratios. This favourable ratio underscores Durban’s reputation as a relatively affordable housing market, offering residents greater financial flexibility in managing their housing expenses and contributing to a higher quality of life.