The short answer is that it is still cheaper to buy an existing house in South Africa than to build a new one, though the difference is getting smaller every year. That said, here is a table for comparison and four points to give you a basic understanding of the facts around this issue.
Building Vs Buying
Estimated Average Property Price in Different Cities| Provinces | Buying | Building |
|---|---|---|
| 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 774 898 |
| 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 |
Average prices per square meter to build a house in South Africa
Here are the average prices per square meter to build a middle class freestanding residential house:- South Africa – R12 920
- Kwa-Zulu Natal – R14 860
- Gauteng – R13 330
- Western Cape – R13 150
- Free State - R11 290
- Eastern Cape – R10 890
- Northern Cape – R10 370
- Mpumalanga – R9 190
- Limpopo – R8 450
- North West – R7 980
- Low-cost housing: +/-R5 000 per square metre
- Middle class, market quality house: R7 000 - R15 000 per square metre
- High-quality homes: Upwards of R20 000 per square metre
Bear in mind that the per square metre cost of building a house indicates your baseline cost -here are some other factors you have to keep in mind:
1. Buying is cheaper, but every year less so
According to ABSA’s Annual Housing Review, buying a house comes in around 20% cheaper than building one. While this gap has been closing each year slightly, it still has some way to go.
2. The cost of the land
Without a doubt, the land is plentiful in South Africa. However, land available in populated central areas conducive to a good housing environment is slightly harder to come by. And because of the high demand and decreasing supply, this is a cost that will set you back a good way. If you already have the land, then the decision to build could be more suitable.
3. The cost of services
Water, electricity, roads and sewerage are essential to civilised society. If you decide to build a new house, you will need to consider the cost of connecting that house to the above services that we all need. Procompare can help you find trustworthy local professionals that will make your life a little easier.
4. Contractors, materials and inspections
Once you buy the land and have it developed if need be, you now face the project of building a house. Though you may want to save money by doing some of these jobs yourself or buying cheap materials, we would not advise that. Often, when you buy cheap, you buy twice. Hire the pros. After all, they are experts for a reason.
