Cost of Living in Cape Town

The cost of living in Cape Town is lower than ever for expats moving to South Africa, especially those enjoying being paid in US dollars, UK pounds and Euros! Albeit reclaiming some of the lost ground, the South African rand is at its lowest since 1993.

Due to the economic crisis induced by China's recession, the ongoing drought in South Africa, declining investor's confidence, perceived political and social instability and corruption, the rand value has shrunk considerably during the recent months. The next ranking by the world's big rating agencies Moody's, Standard & Poor and Fitch is awaited anxiously as South Africa is only one level above the so-called 'junk' status in the foreign currency rating. The economy has shrunk and GDP is minus 1.2%. The South African Reserve Bank increased the prime lending rate only slightly, by 0.5% to 10.5%. (basis rate for home loans). 

Living Expenses in South Africa 2016

All on a local salary struggle to meet their financial commitments and reduce debt, but for foreigners living in South Africa, if paid in foreign currency, the living expenses here can hardly take it up with with the living expenses in other big expat cities like London, New York or Paris. Of course, with the recent developments and the rand weakness, many foreign nationals visiting or staying in Cape Town can enjoy life in the Cape even more. The expat's 'cost of living' in Cape Town was already considered to be 66% cheaper than in London/UK, 69% cheaper than in New York/USA and 32% cheaper than Berlin/Germany, according to various statistics published before the rand's 'crash' late last 2015.

In 2015, Mercer ranked Cape Town as the eight cheapest city in the world in their World Wide Cost of Living Survey of 207 cities. 

Cape Town image by Pipop BoosarakumwadiLiving in Cape Town: View over the city bowl

For expatriates relocating to South Africa, however, it is important to know, that Cape Town living is more expensive than Johannesburg living as especially the rental costs are higher in Cape Town. Housing costs in Cape Town 22% more than in Johannesburg - while employees in Johannesburg generally enjoy higher salaries too!

Regarding the costs for transport, food, clothing, household goods and entertainment, these are currently experiencing 'rate' hikes due to the low rand and higher costs involved for importers of international products. Still, you will find living expenses in South African cities are at best comparable with those in Ottawa/Canada, ranking currently 162th, and Winston-Salem/USA, ranking 157th out of 207 countries, and are the 'cheapest' cities in North America. See Mercer for more info on these rankings. The Economist Intelligence Unit (EIU) offers detailed country surveys on the real cost of living as well.

Cost of Living Calculation

To calculate your personal cost of living, you need to take into account the following factors:

  • Cost of food items and daily grocery shopping
  • Cost of clothing, shoes, cosmetics
  • Cost of housing: rent, mortgage bond, utilities and security
  • Cost of keeping a car: petrol, insurance
  • Cost of personal local insurance for your home and its contents
  • Cost of leisure activities and going out in Cape Town

Cape Town Cost of Living 2016

Read on below what costs a family of four will encounter or how much you will need to expect to pay for average services.

Food prices in South Africa are comparable with or cheaper than in most European or American cities. Cost for local food, white bread, milk etc. is partly subsidised, but imported grocery goods are quite expensive. Often however you might be able to replace them with good quality local products. Expect to pay around R5,000 - R8,000 monthly for a family of four. More on food.

Clothing is lower in price than overseas. You can get even designer wardrobe for half the price you would pay in Rome/Italy or Paris/France. The tricky thing will be more where to source the goods than the price. Importing the goods, i.e. having mail orders imported to South Africa, will be tremendously expensive. Good quality leather shoes always have been on the pricey side with prices comparable with European cities.

Housing prices are comparably low in Cape Town. You can find three bedroom houses for rent (unfurnished) in good housing areas for R20,000/month. Expect however to pay quite a bit more if you prefer to live in a gated estate or want to have a pool or other extras. In areas popular with expats, rent can reach R40,000/three-bedroom house/apartment or even more. More on housing.

Utility prices are soaring at the moment. Council costs (water, waste water and waste collection) amount to roughly R800 per month. Over the last years, Capetonians have been confronted with a hefty price rises for electricity, another price increase of about 13% is expected for this July. This means the average four-person-household will have bills around R1,500 per month, with higher rates depending on use of pool, heating, air-conditioning, tumble dryer etc. Monthly payments to a security company for monitoring your alarm system will cost around R500 per month. 

Housing prices are comparably low in Cape Town. You can find three bedroom houses for rent (unfurnished) in good housing areas for R20,000/month. Expect however to pay quite a bit more if you prefer to live in a gated estate or want to have a pool or other extras. In areas popular with expats, rent can reach R40,000/three-bedroom house/apartment or even more. More on housing.

Utility prices are soaring at the moment. Council costs (water, waste water and waste collection) amount to roughly R800 per month. Over the last years, Capetonians have been confronted with a hefty price rises for electricity, another price increase of about 13% is expected for this July. This means the average four-person-household will have bills around R1,500 per month, with higher rates depending on use of pool, heating, air-conditioning, tumble dryer etc. Monthly payments to a security company for monitoring your alarm system will cost around R500 per month. 

The fees for the education of your children also have to be taken into account. The fees for private schools are relatively low compared to rates you would have to pay overseas. The average charge will start in the region of R35,000 per child/year. Some prestigious private school however charge much more, around R100,000/school year. More on schools.

Costs for private transport are quite steep. The car prices now are still relatively stable, but new cars come with a hefty price tag compared to prices overseas. Diesel and Petrol in Cape Town now costs around R12 per litre. The petrol and diesel prises are usually only change on a Wednesday after an announced price change. The prices are very similar at most of the petrol stations in the city and vary only a couple of cents. This way a full tank for a medium sized car will cost you around R800. Car insurance for a decent city hopper like VW Golf will set you back another R600/month. Insurance for bigger cars are much higher and depend also on the location of registration. Annual car registration is comparatively low. 

Leisure Activities are again relatively cheap and dining out is not as expensive as in many other great places around the world. You can have a delicious meal in a good restaurant with starter, main-course and one decent bottle of wine and after-meal coffees at R1,000 for four persons. Cinema tickets cost usually between R70 and R90 for 3D-movies, but discounts may apply when using a membership card. Different prices at the different cinema chains. TV licence fees as well as satellite programs packages are amounting to about R500 p.m.

Membership for a gym costs monthly around R700/person with a two-year membership. Children often can join with the parents for a minimal fee such as R150 per year at Virgin Active.

VAT: Value Added Tax

All prices in South Africa include VAT (value added tax) of 14%, except for some basic food such as maize, white bread, fruits and vegetables, transport and education.

For personal items, non-residents, visitors and tourists, can claim VAT refunds at border posts. Read more here.

Sources for Cost of Living Information: City of Cape Town website, Mercer.com Statistics, Expatistan.com, Flyingyak.com

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