How rising rent costs burden young graduates in today's job market

The South African rental market presents another layer to the affordability challenge for young graduates in the country.  

A new report by The TEFL Academy reveals how the cost of living for young South Africans has escalated sharply over the past two decades, contrasting the realities faced by millennial graduates entering the job market in 2005 with those of Gen Z graduates in 2025.

The study draws on data from Stats SA, National Treasury, the Quarterly Labour Force Survey, and the Household Affordability Index, using inflation-adjusted benchmarks across housing, transport, education, groceries, and debt to paint a generational picture of how graduate affordability and purchasing power have shifted relative to income.

“For many young South Africans, the dream of financial independence feels further away than ever before, says Rhyan O’Sullivan, managing director at The TEFL Academy.

“Gen Z isn’t struggling because they lack ambition or ability; they’re facing an economic landscape that has fundamentally shifted. Yet despite the odds, they’re showing remarkable adaptability, finding new ways to build meaningful lives on their own terms.”

In 2005, millennials graduated into an economy where salaries were broadly aligned with essential costs like housing, transport, and education.

Some 20 years later, the Gen Z are said to face a far harsher reality: youth unemployment at 46% according to the latest Quarterly Labour Force Survey, soaring rents up, student debt tripled, and salaries that have only risen, but lost around 21% in real terms when adjusted for inflation.

This widening gap has eroded purchasing power, delayed financial independence, and left many Gen Z graduates reliant on family support well into their adulthood.

In 2005, renting was far more manageable for young professionals;  the average monthly rent of around R1 500, according to archived data from the South African Property Owners Association (SAPOA) and early PayProp rental trend estimates, accounted for roughly 20% of a graduate’s income.

This left room for savings, travel, and other discretionary spending, and many graduates were able to live independently in centrally located apartments or shared houses near work or university hubs.

However, last year, the average rent across South Africa had climbed to R8 598 per month, according to PayProp’s Rental Index Annual Market Report 2024 Edition. For early-career graduates earning between R6 000 and R9 000 per month, as reported by Indeed and Glassdoor, 2025, rent now consumes between 48% and 64% of their income.

The more affordable options, around R4 000 per month, according to Private Property (2025), still account for nearly half of a lower-earning graduate’s take-home pay.

When combined with deposits, utilities, and transport costs, this leaves little to no financial margin, making independent living increasingly out of reach and forcing many Gen Z professionals to rely on shared accommodation or family support, a stark reversal of the financial autonomy many millennials enjoyed two decades ago.

Even with these options, rental costs represent a substantial portion of income, forcing many young professionals to rely on family support or shared accommodation.

Combined with large deposit requirements and rising living costs, this means that affordable renting remains a major hurdle, making financial independence a significant challenge for the majority of Gen Z entering the workforce today.

In comparison, the average internship salary in South Africa in 2025 ranges between R6 000 and R9 000 per month, depending on the city and field.

For instance, in September 2025, Indeed reported an average intern salary of approximately R5 847 per month, while Glassdoor indicated an average total pay of R9 000 per month in October 2025.

When compared to 2008 graduate salaries, this represents a nominal increase of just 8% to 44% over nearly two decades, a rate that falls far behind inflation and overall economic growth during the same period.

This contrast highlights how, despite two decades of economic expansion, entry-level earnings have remained largely stagnant in real terms, reinforcing the persistent affordability and financial independence challenges faced by young professionals entering today’s workforce.

Basic living costs have also surged in proportion to earnings. Monthly groceries rose from around R1 500 in 2005 to a household food basket of R5 443 in 2025, a 263% increase that now consumes a far larger share of take-home pay.

For millennials entering the workforce in 2005, food was a predictable and relatively stable portion of their budget, leaving room for savings or discretionary spending.

For Gen Z graduates, however, escalating grocery bills compete directly with rent, transport, and debt repayments, forcing many to cut back on nutritional quality or rely on cheaper, less healthy alternatives. This shift highlights how rising food costs don’t just affect finances but also quality of life and well-being.

Student debt has tripled over the past two decades, with the average NSFAS loan balance rising from R30 000 to R90 000, a 200% increase. Unlike millennials, who entered the workforce with comparatively lighter debt loads, today’s graduates are starting their careers in the red, often before earning their first salary.

Servicing this debt delays milestones like moving out of shared housing, purchasing a car, or saving for retirement. It also widens the generational wealth gap, as Gen Z graduates are forced to prioritise repayments over wealth-building opportunities, leaving them financially disadvantaged compared to their millennial counterparts at the same stage of life.

The TEFL Academy notes that this is not just an economic issue, but also a social one: many Gen Zs remain dependent on family support into their late 20s, are delaying homeownership and family formation, and are increasingly reliant on credit.

Despite being more educated and digitally skilled than millennials were in 2005, today’s young adults feel less financially secure and have fewer opportunities to build wealth.

Brendan Pitt, a South African working as an English as a Foreign Language teacher in Thailand, shared his experience: “For me, coming to Thailand was part personal and part practical. Limited job opportunities in South Africa made it harder each year to secure decent work."

In contrast, living costs in Thailand are significantly lower, and the teaching lifestyle offers flexibility and breathing room.”The Cost of Being Young in 2005 vs 2025 in South Africa aims to spark discussion about the widening affordability gap and the urgent need for policies and pathways to support today’s youth.

"While millennials face challenges, the report makes clear that Gen Z in South Africa is paying significantly more of their income for basic survival, housing, food, education, and transport, even as nominal earnings have risen.

At the beginning of September, Blackbullion South Africa, in partnership with Sanlam Foundation, announced the launch of The ZAKA Index, a new evidence-based study that takes a close look at how young people in South Africa think about money, what they earn and spend, and how they are making ends meet. 

The first edition of the Index surveyed people aged 18 – 35 nationwide, combining spending data with open responses to map the lived realities of youth finances.  

The study finds that 82% of respondents earn less than R6 000 per month, with food ranked as the single biggest monthly expense for 51% of participants.

Rent or accommodation was the next highest item for the surveyed youth, taking 25% of these youth’s earnings.

The resultant financial strain was described as pervasive, with 51% of the youth reporting being financially stressed every day, and four in five saying they have skipped meals or delayed important payments due to lack of funds. 

Independent Media Property