Top 5 African Cities with the Most Expensive Real Estate in 2024
Investing in a home in Africa’s burgeoning real estate market is becoming increasingly attractive. As the continent undergoes a significant transformation, driven by rapid urbanization and economic expansion, the United Nations forecasts that by the mid-21st century, Africa will host six out of the ten largest global megacities.
This urban migration, fueled by the pursuit of employment and improved living standards, precipitates a marked escalation in property values across African cities. While this trend presents exciting opportunities, it poses challenges, especially for prospective homeowners. According to the World Bank, more than half of the urban population in Africa resides in informal settlements, a testament to the acute shortage of affordable housing.
In response, Numbeo, a comprehensive database platform, has adopted the price-to-income ratio (PTIR) as a key indicator to gauge housing affordability. This metric contrasts an apartment’s median price with a family’s median disposable income, quantifying it in terms of the number of years required to afford a property. A city with a high median apartment cost relative to the average income signals a potential affordability crisis.
Conversely, a lower PTIR denotes enhanced affordability, implying that a median-priced apartment with fewer years of income is attainable. A higher PTIR, however, indicates financial pressure on residents, as accumulating sufficient savings for a property becomes a prolonged endeavor. Considering this, let’s delve into the top 5 African cities where real estate prices are the most prohibitive in 2024.
This illustration ranks the top five African metropolises by their real estate costs in 2024, using the price-to-income ratio (PTIR) as a yardstick. Lagos and Cairo top the list, reflecting their notably high property values when weighed against residents’ earnings. Conversely, Durban emerges as a more budget-friendly choice within the spectrum of expensive urban housing markets.
1. Lagos, Nigeria
Hurghada, Real Estate for sale
Lagos, often hailed as a beacon of opportunity, has earned its moniker due to its status as the economic powerhouse of Nigeria. As the primary gateway for international commerce into the country, Lagos boasts a burgeoning population that surpasses 15 million, positioning it among the fastest-expanding urban areas on the continent. This rapid growth, a direct consequence of the city’s economic dynamism and urban development, significantly impacts the housing market. The city’s steep price-to-income ratio of 19.2 underscores Lagos as the African city with the loftiest real estate costs. Looking ahead, the United Nations envisions Lagos evolving into one of the six largest megacities in Africa by the year 2050.
2. Cairo, Egypt
Egypt, Real Estate for sale
Cairo, Egypt’s vibrant capital, is experiencing a surge in housing market prices, reflected in a price-to-income ratio of 18.4. This trend is propelled by the city’s expanding population, a common thread it shares with Lagos. As the continent’s third most populous nation, ranking 14th worldwide, Egypt’s real estate landscape is changing significantly. The JLL Cairo Real Estate Market Overview for Q1 2024 reports a remarkable uptick in residential sales prices within Cairo’s secondary market. Notably, the 6th of October area saw prices soar by approximately 83%, while New Cairo experienced an even more dramatic increase of 95%
3. Nairobi, Kenya
In Nairobi, the price-to-income ratio is 11.1, indicating that an average individual would need approximately 11.1 years of salary to afford a median-priced apartment. As Kenya’s capital, Nairobi is a pivotal economic and transport hub, drawing businesses and residents alike. This has spurred a population boom, with the city’s numbers swelling from 290,000 in 1960 to over 5 million by 2023. Despite this growth, Nairobi’s expanding middle class often finds the formal housing market beyond its financial reach. The city’s purchasing power index is reported to be 30.2, reflecting the general affordability of goods and services relative to income
4. Cape Town, South Africa
Africa, Real Estate for sale
South Africa remains a dominant force in the African real estate sector. In 2022, the country led the continent in real estate investment, attracting approximately $2.2 billion. This substantial figure underscores South Africa’s significant role in shaping the landscape of African property investment.
Cape Town is the premier metropolitan area for high-end residential purchases in South Africa. In 2021, the average residential property commanded a price tag nearing 1.6 million South African rands. When juxtaposed with the average disposable income of South African households, which was 50,500 South African rand or about USD 2,738, the resulting price-to-income ratio for Cape Town was calculated at 5.4. This ratio serves as a testament to the city’s status as a hub for luxury real estate within the nation
5. Durban, South Africa
Positioned on South Africa’s East Coast as the nation’s third-largest city, Durban presents a more balanced real estate market with a price-to-income ratio 4.2. This figure is notably lower than the other cities on the list, reflecting a more accessible property market. Over the past year, Durban has seen a population increase of 34,125, equating to an annual growth rate of 1.06%. Despite this growth, the city maintains relatively affordable housing options compared to its residents’ income levels. The purchasing power index in Durban, which measures the relative affordability of goods and services, stands at 82.4
Check out our new project.
Balkan Beach Resort
