Many lower-income households spend almost as much on transport as conventional affordability guidelines suggest they should spend on housing.
The composition of inflation shows that the fastest price increases are occurring in the essential costs associated with owning or renting a home, steadily eroding housing affordability.
Housing affordability should no longer be measured simply by comparing house prices with household incomes, says Francois Viruly, the chief economist at Datazone.
He says the true cost of housing includes transport, electricity, municipal charges, water, insurance and other unavoidable living expenses.
“When these costs rise together, households have less disposable income available for housing, making both home ownership and renting progressively less affordable,” Viruly says.
