10 Things you need to know before building your house

Article summary

• The cost of building a home is determined by square meters.
• You can fund construction with a building loan.
• You’ll need to hire an architect, contractor, and structural engineer.
• Plans need to be approved by the local municipality.

It’s a homeowner’s dream; to not only have your own home but to have forged it in your image.

Obviously, building a home is different from buying one in a number of ways. For one, you really have to know what you want, and you need to know what the process entails. Furthermore, the cost of building a house is higher but you save in other ways.

We help you prepare by listing 10 things you need to know:

1. The cost is based on square meters.
2. You can fund the construction with a building loan.
3. You don’t have to pay transfer costs or transfer duty.
4. You can build green.
5. There’s less competition.
6. You need to hire a number of professionals.
7. You’ll need to submit the plans to the local council.
8. You’ll need to register the property with the NHBRC.
9. You’ll need to be on-site as often as possible.
10. Expect the unexpected.

1. The cost is based on square meters

• The average cost of building a home is R10 000 — R20 000 per square meter (as of 2023).
• You can find a more detailed breakdown of cost per square meter across the country here.
• Of course, there are some other factors that affect the cost of building a house, such as the quality of plaster and paint, and the location.  But size in square meters is the primary factor you want to keep track of.

2. Building loans

• A building loan can be used to finance the construction of a building on vacant land.
• It can also be used to finance additions and renovations to an existing home.
• Applying for a building loan is similar to applying for a home loan except that the bank will not pay out the entire loan at once.
• The bank pays out the loan in stages. A portion of the loan is paid out each time a phase of the construction is complete.

3. You don’t have to pay transfer costs or transfer duty

• Transfer costs are the fees paid to a conveyancing attorney to transfer the property from the seller to the buyer. Since there’s no seller in this case, you don’t have to pay for a transfer.
• Transfer duty is a tax on the transfer of property (only applies to properties valued higher than R1 100 000). Again, no transfer means no transfer duty.

4. You can build green

• You can and should build a property that incorporates green technology, such as solar panels and water recycling systems. This will increase the value of the home as well as help you get off the grid.

5. There’s less competition

• There’s less competition for buying a plot of land and building a home on it than there is for buying established homes.

6. You need to hire a number of professionals.

This includes:

• An architect to draw up plans for the construction.
• A builder, who will need to be registered with the National Home Builders Registration Council (NHBRC). Try to find a builder with lots of references, and/or rely on word-of-mouth.
• An engineer, who will be responsible for ensuring the integrity of the building’s structure.

7. You’ll need to submit the plans to the local council

• The municipality has to approve the construction, basing its decision on factors such as the impact on the surrounding environment and heritage sites.
• You’ll need to fill in a number of forms. Find out more here.
• You need to appoint an architect before submitting building plans, so they can ensure it meets regulations. The architect can also help you with the approval process.
• Building plans generally take up to three months to be approved.

8. Registering the property with the NHBRC

• Failure to register as a home builder is a criminal offence.
• The new home must be registered at least 15 days prior to construction.

9. You need to be on-site as often as possible

• The labourers aren’t as invested in the home as you are, and although there are people on the site to supervise the construction, you can only really trust yourself to spot the little details. You’ll be the one living in the home after all.
• Problems like a window being in the wrong place are harder to fix after the construction is complete. Best to catch things like that before it’s too late.

10. Expect the unexpected

• Building projects rarely go exactly to plan.
• Expect the project to take longer than originally planned.
• Deal with any complications that emerge without getting disheartened. Unforeseen hurdles are to be expected with something as complex as building construction.

Applying for a home loan? Determine what you can afford

If you’re looking to buy an established home, prequalification can help you determine what you can afford, allowing you to house hunt within your price range.

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