How the gender pay gap in SA is limiting home affordability for single women

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According to StatsSA, the average wage or salary in the formal sector of SA’s economy was just over R21,000 a month in the fourth quarter of 2018. “But according to the Global Wage Report, which covers 70 countries and about 80% of wage-earners around the world, SA has a gender pay gap of 28,6%.

“This means that the average wage or salary paid to women in SA is actually only around R15,000 – and this disparity makes a massive difference to the type of home that the average single woman buyer can afford.”

To illustrate the point: It currently takes a household income of around R33,000 to qualify for a R1m bond, assuming that the applicant has enough discretionary income after the payment of other monthly expenses to afford the monthly instalment of around R9,900.

“And that requirement would probably not be a problem at all for a married couple who are both working. Even if they combined just the average male and female salaries their household would have earnings of more than R36,000,” he says.

“But while a single man earning R33,000 a month could also qualify, the single woman with the same qualifications and doing the same job would probably only be earning around R24,000 a month – and would thus not qualify.

“Assuming the current base home loan interest rate of 10.25% for everyone, she would only be able to afford a bond of around R733,000 on that salary.”

The Lightstone figures show that single women purchased about 72,000 homes in SA last year, compared to couples who purchased about 65,000 homes, and single men who purchased around 62,000 homes.

Average purchase price

“But they also show,” Kotzé points out, that the average purchase price paid by these single women buyers was just over R700,000, compared to the average of around R900,000 paid by single men and R1.1m paid by married couples.

“In other words, the gender pay gap is having a very clear effect on what women can afford – in SA as well as other countries - and limiting them to smaller and less expensive properties, even though many of them are also parents with one or more children to accommodate.

“Indeed, in our experience one of the biggest property purchase motivators for single women is the desire to provide a permanent and secure home for children that are in their sole care. This is not generally the case among single men, although the intention to start a family and find a home big enough for children is often also a motivator for married couples.”

It might be interesting, he says, to track single parents as a separate category of buyers in future, “but in the meanwhile, we all need to do more to address the gender pay gap so that women are not penalised in the real estate market”.