In recent years, urbanization in Africa has increased at an unprecedented rate, resulting in tremendous expansion in major African cities. As populations grow and economic possibilities rise, the need for affordable housing becomes crucial. One of the most important variables in meeting this need is the affordable property loan index, which measures how easily citizens can obtain housing finance.
In many African cities, the idea of owning a house remains out of reach due to high property costs and expensive loan interest rates.
By developing a favorable property loan index, governments and financial institutions may create an atmosphere in which more residents can qualify for loans and make monthly payments.
It goes without saying that local economies can be greatly stimulated by affordable real estate financing.
When the residents of an African city can obtain loans to purchase homes, this can lead to more economic growth as real estate services proliferate which bolsters the job market and the region’s overall housing infrastructure.
Additionally, an affordable loan index reduces the risk of homelessness, as population growth in Africa, which is considered to be the fastest growing, threatens to outpace affordable housing.
The Loan Affordability Index in Numbeo’s Property Value and Investment Indexes, which this list is based on, is a metric designed to assess how affordable it is for individuals or families to take out and repay a mortgage loan in a particular country or city.
Loan affordability index is an inverse of mortgage as percentage of income. Numbeo’s formula for this is : (100 / mortgage as percentage of income) (higher is better).”
In return, mortgage as percentage of income is calculated by assuming a 100% mortgage for 20 years on a 90-square-meter home.
With that said, here are the African cities with the most affordable housing loans.
Top 5 major African cities with the most affordable housing loans mid-2024
| Rank | City | Country | Affordability index | Mortgage as percentage of income | Global rank |
|---|---|---|---|---|---|
|
1. |
Johannesburg |
South Africa |
2.8 |
35.4 |
32nd |
|
2. |
Port Elizabeth |
South Africa |
2.3 |
43.0 |
41st |
|
3. |
Cape Town |
South Africa |
1.5 |
67.2 |
89th |
|
4. |
Durban |
South Africa |
1.5 |
66.2 |
90th |
|
5. |
Rabat |
Morocco |
1.0 |
99.2 |
160th |
