- The costs of building a home include the land costs, building materials, professional fees and connecting utilities.
- Building a house reduces or eliminates certain costs, saving you in the long run.
- The gap between the cost of buying vs building is shrinking every year.
It’s an attractive prospect; being able to forge a home in your own image. But what about the expense versus simply buying an existing home? We evaluate.
Note: Our Bond Calculator can help you compare the cost of building vs buying by determining what you will pay per month on your home loan.
The costs of buying land and building a house:
- The cost of the land. The location will affect the price ie. whether you want to build in a remote area or an area closer to the city centre (obviously land in urban areas will be harder to find).
- The cost of construction (calculated according to the number of square meters).
- The cost of materials utilised in construction (ie. bricks, cement).
- The cost of professionals, such as the quantity surveyor, architect, various engineers and geologists.
- The cost of connecting services such as water, electricity, and plumbing.
Cost per square meter
According to briefly.co.za, the average cost, as of 2022, is R10 000 to R20 000 per square meter.
Here’s a more detailed breakdown by area (taken from procompare.co.za)
|Province||Cost per square meter||Standard (146 meters) home||90 meter home|
|KwaZulu Natal||R19 230||R2 800 000||R1 730 000|
|Gauteng||R15 730||R2 296 000||R1 410 000|
|Western Cape||R14 050||R2 050 000||R1 260 000|
|Mpumalanga||R11 390||R1 662 000||R1 020 000|
|Limpopo||R10 550||R1 540 000||R950 000|
|North West||R10 130||R1 478 000||R911 000|
Comparing the cost of building to the cost of buying
According to procompare, the average prices for purchasing a home versus building a home in South Africa are as follows:
|Cape Town||R1 755 317||R2 016 806|
|Durban||R1 102 022||R1 994 670|
|Pretoria||R1 556 558||R1 993 525|
|Johannesburg||R1 270 915||R1 774 808|
|Kimberley||R1 182 000||R1 536 964|
|Bloemfontein||R1 150 000||R1 496 825|
|Port Elizabeth||R1 100 000||R1 397 159|
|Polokwane||R1 050 000||R1 323 375|
Buying a home is cheaper but not for long
So the table shows that buying a home is still cheaper, but not by a significant amount, and the gap is shrinking every year.
Furthermore, building a home can save money by reducing or eliminating costs in the following ways:
- You don’t have to pay transfer duty.
- You have fewer maintenance issues.
- You don’t have to pay administrative fees for the legal process of transferring a home from one owner to another.
- Building a new home provides tax benefits, such as the ability to claim depreciation over the next few years.
When you add all these expenses together, building a house probably amounts to less than buying a house in the long run.
The other benefits of building a house
Plus building a house provides other advantages, such as:
- You can build a modern home that is more tech-friendly.
- The feeling of knowing you and your family will be the first to live in the home.
- There’s less competition for buying a plot of land and building a home on it than there is for buying established homes.
- Designing and building the home yourself will strengthen your feeling of ownership over it. The stories you’ll share with your friends while you’re enjoying a cold one around the braai become more real, and you’re passionate about them because you were involved in the process.
Applying for a home loan
Should you choose to purchase a home instead of buying one, ooba Home Loans can help by submitting your home loan application to multiple banks.
This allows you to compare deals and choose the one with the lowest interest rates.
So when you’re ready, apply for a home loan with ooba Home Loans.
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