Due to the fact that women generally earn less than men, they spent 32.5% of their income on rent compared to 28.3% by men, according to the PayProp Rental Index for the third quarter of 2021.
When combined, housing costs, water, electricity and transport account for about half of income, according to the TPN Credit Bureau.
“This is an incentive which drives tenant behaviour towards cost saving leading to downscaling to smaller properties, cohabiting or moving in with friends and family,” said Michelle Dickens, TPN Credit Bureau CEO.
It’s not only rent that accounts for a large portion of tenants’ spend — debt repayments are also high, adding further pressure on disposable income.
Thanks to falling interest rates, women spent 38% of their income on debt repayments which includes on cellphones and insurance compared to 44.1% in 2019, said Johette Smuts, head of data analytics at PayProp SA.
“Men spent 46.1% of their income on debt repayments (47.2% in 2019), or more than R7,000 per month more than women, in the third quarter of 2021,” said Smuts.
Women had 29.5% of their income left after rental and debt repayments, while men had 25.6%. “We’ve seen an increase in credit applications from both men and women which could mean they are struggling to make ends meet on their current incomes,” said Smuts.
According to the PayProp Rental Index, men earned R10,500 more per month than women on average with a take home of R39,500 per month compared to R29,000.
Smuts said while incomes for both genders increased over the past two years, this may not have done much to improve affordability. “In the past year, men’s income grew by 2.5% and women’s by 2.3% — higher than rental growth, but still below inflation.”
Dickens said higher salaries do not always translate into more disposable income, and with rising interest rates, tenants will see an increase in debt repayments which will leave them with less disposable income. Interest rates are expected to gradually increase in 2022.
Tenants’ affordability to pay rent and make monthly debt repayments will remain a cause for concern for landlords who are battling high vacancies. “The interest rate hiking cycle will put pressure on tenants in good standing in the next six to nine months,” said Dickens.
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