Household Expenditure Patterns in Cape Town: Evidence from the Income and Expenditure Survey (IES)

Household expenditure patterns provide important insight into household priorities, living costs, and broader economic conditions. The Income and Expenditure Survey (IES) is a household‑based survey that collects data on acquisitions, consumption, spending, and income among South African households. Alongside the Living Conditions Survey (LCS), it forms part of Statistics South Africa’s household survey programme and provides a detailed view of household consumption behaviour across South Africa (Statistics South Africa, 2024). Using the data from the IES and LCS surveys, this analysis explores changes in household expenditure patterns in Cape Town between 2005/06 and 2022/23.

According to the IES 2022/23, households in the City of Cape Town recorded the highest average household consumption expenditure in South Africa, with an annual average expenditure of R248 539. The gap between average and median household expenditure also suggests a highly uneven distribution of household spending within the metro, with healthier households skewing the average.

Data Notes:

Household expenditure data is sourced from Statistics South Africa (Stats SA)’s Income and Expenditure Survey (IES) and Living Conditions Survey (LCS) covering the period 2005/06 to 2022/23.
Total expenditure values are used and weighted to produce population-representative estimates of household consumption expenditure.
Expenditure categories are based on the Classification of Individual Consumption According to Purpose (COICOP).
Selected COICOP categories have been harmonised across survey rounds to ensure consistency and comparability over time.

34.2%

Largest expenditure category

Housing, water, electricity, gas and other fuels made up the largest share of household spending.

R404 bn

Estimated total household expenditure

Total household consumption expenditure in Cape Town in 2022/23.

Expenditure categories are based on the Classification of Individual Consumption According to Purpose (COICOP 2018), an international standard used to classify household consumption expenditure on goods and services. The latest COICOP framework consists of five levels of classifications, namely divisions, groups, classes, subclasses and sixth groups (illustrated in the diagram below). It ranges from broad expenditure categories to increasingly detailed classifications. For the purposes of this analysis, expenditure is presented at the division level.

1

Divisions

Broadest
level

2

Groups

More
detailed

3

Classes

Further
breakdown

4

Subclasses

More
specific

5

Sixth
groups

Most
detailed

Divisions

The broadest level of COICOP classification. This analysis uses the division level.

Definition

Household consumption expenditure is the monetary value of all goods and services purchased by households, including durable goods and services.

Housing, water, electricity, gas and other fuels accounted for the largest share of household expenditure in Cape Town in 2022/23, with a value of approximately R138.3 billion. This category alone represented 34.2% of total household expenditure, highlighting the large role that housing, water, electricity and similar costs have within household budgets. Transport (R60.1 billion), miscellaneous goods and services (R64.7 billion), and food and non-alcoholic beverages (R51.6 billion) were also among the largest expenditure categories, indicating that household spending remains concentrated in essential and recurring needs.

In contrast, categories such as health (R6.0 billion), recreation, sport and culture (R6.9 billion), and alcoholic beverages, tobacco and narcotics (R3.9 billion) accounted for smaller shares of total household expenditure. This suggests that a smaller or limited proportion of household budgets is allocated toward less frequent expenditure categories.

Relative to South Africa overall, Cape Town households allocated a larger share of expenditure toward housing, water, electricity, gas, and other fuels, accounting for 34.2% of total expenditure in Cape Town compared to 32.0% nationally. This may reflect the higher cost of housing and basic services within the city.

Cape Town households allocated a smaller share of expenditure toward food and non-alcoholic beverages (12.8%) compared to the national average (16.1%). Similarly, expenditure on clothing and footwear represented a lower share in Cape Town (3.5%) than nationally (5.0%). In contrast, Cape Town recorded slightly higher proportional expenditure on information and communication, recreation, sport and culture, and miscellaneous goods and services.

Overall, the expenditure categories suggests that Cape Town households allocate a higher proportion of their budgets toward housing and other non-food expenditure. Compared to the South Africa as a whole, Cape Town shows a more housing-intensive and service-oriented expenditure profile.

Definition

Housing-related expenditure refers to household spending associated with accommodation and basic household services, including housing costs such as rent, water supply, electricity, gas, and other fuels.

Housing, water, electricity, gas and other fuels shows highest upward trend over the shown period, increasing from 28.5% of total household expenditure in 2005/06 to 34.2% in 2022/23. This suggests that housing and basic services costs are becoming an increasingly bigger part of household expenditure in Cape Town.

In contrast, the share allocated to transport declined substantially from 22.4% to approximately 15% over the same period before stabilising in later years. Food and non-alcoholic beverages remained relatively stable, fluctuating between approximately 11% and 16% of total expenditure.

Information and communication expenditure increased gradually over time, reflecting the growing role of communication-related goods and services within household consumption patterns.

Household expenditure: Cape Town and South Africa

1

Housing, Water, Electricity, Gas and Other Fuels

2

Transport

3

Food and Non-Alcoholic Beverages

4

Miscellaneous Goods and Services

5

Information and Communication

The analysis of household expenditure patterns in Cape Town between 2005/06 and 2022/23 highlights the increasing importance of housing-related expenditure within household budgets. Housing, water, electricity, gas and other fuels consistently accounted for the largest share of expenditure and displayed the strongest upward trend over the period, suggesting that housing and basic service costs are placing growing pressure on household finances in the City.

Compared to South Africa overall, Cape Town households allocated a larger proportion of expenditure toward housing and other non-food expenditure categories, while food expenditure represented a comparatively smaller share of household budgets. Although expenditure patterns across most categories remained relatively stable proportionally over time, the gradual increase in information and communication expenditure also suggest changing household consumption behaviour and the growing importance of communication-related goods and services.

Overall, the expenditure profile of Cape Town suggests a more housing-intensive and service-oriented expenditure structure compared to the national average. These trends provide important insight into household spending priorities and broader cost-of-living pressures within the city.