As a new expat to be, the first question one asks is, “What will my life be like in my new country? My new home?” Some of us are luckier than others and will garner full expat packages from the company we work for, aka all expenses paid baby! Others perhaps, just want an escape from their current lives and living in another country happens to be the route to achieve it. Regardless, it’s difficult to truly gauge what expenses will be like until you’re living in that country.
Hopefully, this article will answer most questions for any USA to South Africa transplants like myself. This post is also part of my Ultimate guide to living in Johannesburg, South Africa.
Note that I did some serious traveling around South Africa and the rest of Africa. For the purpose of this article, I didn’t factor in traveling expenses. To read about my South Africa travels, check out these posts!
- The Perfect Two Week Itinerary for South Africa
- Cape Town Travel Guide
- Garden Route Road Trip
- Durban Weekend
The Rainbow Nation
South Africa is a unique country when it comes to cost of living. During the Apartheid era, there was extreme wealth among the whites (the rand traded 1 to 1 with the dollar at one point) and extreme poverty for the blacks. Fast forward to the present, and things have started to converge.
Make no mistake however, there is still serious income disparity in this country but that is another topic entirely. As an ex-pat from America, I’m looking to live at the same level, if not better, than my days in New York City. Anyone who has lived in New York city will know this isn’t difficult, especially when having your own 1 bedroom apartment means you’ve made it in life.
Johannesburg vs the rest of South Africa
Johannesburg is the financial hub of Africa. The city itself is vastly spread out but most ex-pats moving here for work will likely reside in the northern suburbs of Sandton. Having traveled through so much of South Africa, it’s clear Sandton is the most expensive city in the country.
Cape Town comes a very close second as cost of living has jumped due to its tourism boom, especially in real estate. Pretoria, on the other hand, is the third largest city and only 45 minutes from Joburg, but you can expect to pay up to 50% less compared to Joburg/Cape Town!
Inflation in South Africa
Inflation is much more prevalent than in America. As with all emerging market countries, South Africa has an inflation rate of 6+%, three times that of America. This is just the national average however, and with the country’s massive income disparity, the inflation rate likely hovers closer to 10% for people living more first world lifestyles.
Nandos, one of my favorite restaurants in the country, raised the price on their half chicken almost 10% in the span of a year!
As South Africa’s currency depreciates against the dollar, so does the purchasing power of its residents. Anything that needs to be imported from outside will become more expensive as the currency weakens. The best example of this is petrol prices that have gone up almost 20% since I’ve arrived in early 2013. If you’re moving to this country and earning Rand, this is something that will affect your purchasing power and yet another reason why inflation is so prevalent.
Without further ado, here are some general comparisons of price. For comparison purposes, I’ve added Chicago, a large city, but more comparable to the rest of America, and Pretoria, a viable South African counterpart.
For the purpose of this article, let’s assume the Rand is trading at 10R to the dollar.
As it has been almost 4 years since I wrote this article, the rand is now trading at R12.6 to $1 USD. The currency has seen many swings in the past 4 years trading to 17 at one point but it has stabilized for the time being in the 12-13 range. For the purpose of accounting for inflation in 2018, please add 20% to the ZAR figures in all the tables below to get an idea or what expenses are like in 2018.
|Category||New York City||Sandton||Pretoria|
|1 bedroom apartment (unfurnished)||$3,000||R6,500||R4,000|
|1 bedroom apartment (furnished)||$4,500||R9,000||R6,000|
|Transportation||Subway: $105, Cabs: ~$50||R5,000||R5,000|
|Cellphone (Galaxy S5 on contract)||$100||R600||R600|
|Home Internet||$35||R900: ADSL, R400: 3G Data||R900: ADSL, R400: 3G Data|
|1 beer at Midrange bar||$8||R20-25||R15|
|Dinner for two at a steakhouse||$250||R800||R500|
|1 kg chicken breast||$15||R65||R45|
|3 bedroom apartment||$5000||R15,000||R10,000|
|GDP Per Capita||USA: $50,000||SA: $7,500|
I was never a prominent user of health insurance in America. I paid my monthly premiums just because . . . well, everyone does it, but never used any medical services. I did make sure to always use my dental insurance but that was about it.
Upon moving to South Africa, I’ve taken more interest in this as I always wondered to myself what if I got malaria on one of my trips to East Africa (Malaria is very uncommon in South Africa)? Health insurance in South Africa, to sum it up, is a huge mess. There are seemingly endless choices, with each choice not easily distinguishable from the other. Coming from America where healthcare choices are simple; usually with a good choice, and a better choice, South Africa is just something I have no patience navigating through.
From experience, some of my expat friends with families have experienced nothing but grief and frustration when it comes to any sort of correspondence with their healthcare providers. Nevertheless, health care is still a necessity, but if you don’t have an employer plan, what do you do?
I found the tools on Hippo.co.za very useful when comparing healthcare quotes. Overall, healthcare is a bit more expensive in South Africa. Employers contribute far less to its overall cost, and people make far less in this country than in America, which makes healthcare even more expensive from a cost of living perspective. The actual cost of health-related
|Medical Insurance – SIngle||$450||R2,500-4,000|
|Medical Insurance – Family of 4||$1,000||R8,000-R10,000|
|Medical Insurance Subsized – Single||$100||R1,500-3,000|
|Medical Insurance Subsized – Family of 4||$300||R6,000-8,000|
|General doctor’s visit||$50||R400|
|General dental clean||$80||R600|
South Africans are some of the most car-obsessed individuals I’ve ever met. Cars are not just a method of transportation but a status symbol to many. Cars are also the absolute worst investment possible. They will do nothing but depreciate the second you drive it off the lot and people here don’t care. I half understand why people love their cars so much; the city is so spread out and the traffic so bad, that a good chunk of one’s life is spent in their cars. Everyone still wants that new car smell, knowing that they are paying beyond their means, and that its value will be halved in 5 years.
For example, someone earning $60,000 a year in America would considering spending maximum $15k on a Chevy Impala but someone in SA making a comparable salary would not hesitate to buy that new BMW 3 series worth $35k. In addition, interest rates for car financing are much higher in this country. The average rate is somewhere north of 10% for most individuals! So not only do people make less money in this country, but they buy more expensive cars and finance it a higher interest rates! Just different mentalities in this country which is also why I see more German luxury cars in this country than I do in Germany.
Coming from NYC where we only know subways and walking, transportation is a cost that went up upon moving to South Africa. Overall, new cars are more expensive than in America, but used cars are not. Car depreciation in this country is much higher. I’d highly recommend buying a used car, especially for expats that are here for just a few years.
|New York City||New York (Long Island)||Sandton|
|Monthly Subway Pass||$112||N/A||N/A|
|New Audi A4 2.0TSFI Auto||N/A||$34,000||R400,000|
|2009 Audi A4 2.0TSFI Auto||N/A||$24,000||R200,000|
|New Toyota Corolla (most basic)||$16,000||R210,000|
|New VW Golf (most basic)||$21,000||R240,000|
|2010 VW Golf||$16,000||R130,000|
|New Range Rover Sport||$63,000||R850,000|
|Petrol Cost||Always cheaper||More Expensive|
|Car Insurance (on new Audi A4)||~80-100$||R1.5k|
|5yr car finance||~3%||10% and above|
Rent and housing
Comparing almost any city to NYC will appear as a bargain and Johannesburg is one of them. It was a huge shock to me when I realized I no longer needed to pay $1,600 a month to share a 1 bedroom apartment! Don’t celebrate quit yet. Depending on the exact location you’re interested in, Johannesburg can be quite expensive as well. Be sure to read my guide to renting a furnished apartment in South Africa
Safety is a concern that all new ex-pats will have and almost always this will make one flock towards the areas around Sandton city center. Traffic is another huge issue. If your work is located somewhere in the Sandton CBD, living 15 minutes outside of it without traffic could easily mean 1 hour while in it. For someone that has never driven regularly in his life, this was a huge deal for me. I couldn’t survive driving in so much traffic every day.
With that said, the average cost for a furnished 1 bedroom apartment in the Sandton CBD is around R10,000 a month with unfurnished going for around R7,000. Before you go jumping for joy, realize that this isn’t for anything fancy. There are plenty of people with money in this city and R10,000 won’t get you anything nice in the desirable parts of town. Melrose Arch is a perfect example with a furnished 2 bedroom apartments going for R30,000!
|New York City||Sandton||Fourways|
|1 bedroom furnished||$5,000||R10,000||R7,000|
|1 bedroom unfurnished||$3,000||R8,000||R5,000|
|2 bedroom furnished||$6,000||R14,000||R10,000|
|2 bedroom unfurnished||$4,500||R12,000||R8,000|
|3 bedroom furnished||$7,000||R20,000||R13,000|
|3 bedroom unfurnished||$6,000||R16,000||R10,000|
|Buy 1 bedroom||R600,000||R1,000,000||R650,000|
|Buy 2 bedroom||$1m||R1,500,000||R1,000,000|
|Buy 3 bedroom||Way too much $$$||R2,000,000||R1,500,000|
|30y Mortgage Rate||~4.3%||9.5%||9.5%|
Food and Alcohol
This is without a doubt where most New Yorkers moving to SA will immediately notice a difference. Food and alcohol is cheaper here. Way cheaper. Eating out a restaurant, you’ll feel invincible when confronted with a menu at even the fanciest of restaurants.
I certainly did when I first moved here. I chowed through 80% of all the restaurants in Joburg within my first 6 months. Realizing I no longer needed to pay $50 for a steak or $12 for a glass of wine but rather R150 and R40 might have been the happiest day of my life. These are Sandton prices as well, likely the most expensive in the country so it only gets cheaper from here! Alcohol at bars are significantly cheaper with a beer going for around R20-25 and shots around the same price. Gone are the days where one must drink before they go out!
Groceries are certainly cheaper than in NYC but compared to the rest of America is only marginally cheaper. I’ve found that it costs the same to eat out as it does to cook. There are plenty of grocery stores at all price ranges so for all the chef’s out there, don’t worry.
|Glass of Wine at restaurant||$12||R40|
|Beer at restaurant||$7||R25|
|Shot of Jameson at a bar||$8||R20|
|Rum and Coke at bar||$8||R35 (coke is charged separately)|
|300g Fillet at a steakhouse||$50||R160 (includes sides)|
|Seafood risotto at upscale Italian restaurant||$30||R150|
|1.5L of milk||$2||R15|
|1kg of sirloin steak at grocery store||$25||R100|
|Box of Special K cereal||$6||R30|
Summing it up
Hopefully with this article, I’ve been able to paint a good picture of what it costs to live in Joburg. While it’s cheaper than it was for me to live in NYC, it is not as cheap as someone might think, especially if you earn the local currency. Compared to other cities in America like Atlanta, Chicago, or Minneapolis, living in the Sandton CBD may even appear expensive. Nevertheless, it all depends on the type of lifestyle you want.
|Housing||(Much) More expensive|
|Health Insurance||More expensive|
|Cellular service||More expensive|
|High Speed Home Internet||More expensive|
|Cable television||More expensive|
|Gym membership||More expensive|
|Clothing||More expensive (imported clothing is always more expensive)|
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