The cost of building a house in South Africa

Article summary

• The house is measured in square meters, with the average rate per square meter being available on the STATS SA website and at various municipalities.
• Other factors that will affect the price include location, and the quality of building materials used.
• You can fund the construction with a building loan.

Building a house from scratch is a substantial undertaking, but it grants you the opportunity to forge a home in your own image. What does it cost and how will you fund the home?

How much does it cost to build a house?

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)

Some additional information on building a house covered here

1. The factors that affect the cost
2. What goes into the final cost of building a house
3. Costs you save by building a house
4. Funding the construction of a house

1. The factors that affect the cost

The cost of building a house depends mainly on the following factors:

• Location: Whether you intend to build in a developed urban area or a remote location will influence the size of the house you’re going to build, which in turn affects costs. It’s not just about how good the location is. Houses built near the coast, for example, need thicker roofs which add to the cost.
• Quality and design: The quality of plaster and paint, the quality of the soil, the design of the structure, the thickness of the walls and so on.
• Size: Floor size is one of the main factors in determining the home cost. Measured in square meters; the higher the square meter count, the higher the price.

2. What goes into the final cost of building a house

• Cost per Square meter: The number of square meters can be gleaned from the architect’s plans for the building, while the average rates per square meter can be accessed at the STATS SA website. You can also get the average rates from municipalities, property developers, contractors and quantity surveyors.
• Construction: Includes the cost of materials required to build the outer shell of the building, such as bricks, cement and windows.
• Specialist items: Cupboards, lights, kitchen and bathroom fittings; and so on.
• Professional fees: Professionals who will need to be involved in the construction of the home include the quantity surveyor, architect, various engineers and geologists.
• Miscellaneous fees: Such as travel and accommodation fees for remote sites, administrative fees and planning expenses.

3. Costs you save by building a house

• 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.

4. Funding the construction of a house

You can fund the construction by acquiring a building loan.

A building loan is similar to a home loan, with one major difference; the bank does not pay out the loan all at once, but rather in stages. They pay out a portion of the loan each time a phase of construction is completed.

The process of applying for a building loan also requires some additional documentation, such as proof of the builder’s registration with the National Home Builders Registration Council (NHBRC), and provisional plans for the project (drawn up by an architect).

As with a home loan, you will need a good credit record in order to acquire a building loan.

Find out your credit record, and what you can afford

Getting prequalified will provide you with your credit score, and an idea of what you can afford whether purchasing or building a home.

You can get prequalified by contacting an expert at ooba Home Loans, or by using our free, online qualification tool, the Bond Indicator.