The short answer is that it is still generally cheaper to buy an existing house in South Africa than to build a new one in 2025/2026, although the best choice depends on your location and priorities. Building a new home typically costs 20% to 30% more than purchasing a comparable existing property. This guide provides a comparison and key points to help you understand the facts around this issue.
Building Vs Buying: Cost Comparison by City (2025/2026)
The table below compares the average price of buying an existing home versus the estimated cost of building a new 150m² mid-range house in major South African cities. Note that building costs exclude the price of land.
| City/Province | Average Buying Price | Estimated Building Cost (150m² home) |
|---|---|---|
| Cape Town (Western Cape) | ~R2,000,000 | ~R2,220,000 |
| Durban (KwaZulu-Natal) | ~R1,100,000 | ~R2,505,000 |
| Johannesburg (Gauteng) | ~R1,500,000 | ~R2,250,000 |
While buying is cheaper in most areas, the high property prices in Cape Town close the gap significantly. In Gauteng and KZN, the cost to build is substantially higher than the average purchase price.
Average prices per square meter to build a house in South Africa
Here are the average provincial costs per square metre to build a mid-range residential house in 2025/2026. For a full breakdown, see our detailed guide on the cost of building a house.
- KwaZulu-Natal – R16,700
- Gauteng – R15,000
- Western Cape – R14,800
- Free State - R12,700
- Eastern Cape – R12,300
- Northern Cape – R11,800
- Mpumalanga – R10,400
- Limpopo – R9,600
- North West – R7,980
Pros of Building a House
- Complete Customization: You design the exact home you want, from layout to finishes, and can incorporate modern, energy-efficient features like solar power from the start.
- Everything is New: A new home means minimal maintenance and repairs in the early years and comes with structural warranties (e.g., NHBRC).
- No Transfer Duty: You only pay transfer duty on the land, not the building itself. With the exemption threshold now at R1.21 million, many land purchases will incur no duty.
Cons of Building a House
- Higher Upfront Cost: Building is typically 20-30% more expensive than buying an equivalent existing home and requires a contingency fund of 10-15% for overruns.
- Time and Hassle: The process is long (12-24 months) and can be stressful, involving managing contractors, potential delays, and countless decisions.
- Financing and Land: Securing a building loan is more complex than a standard mortgage, and finding affordable, well-located vacant land can be difficult and expensive.
Pros of Buying an Existing House
- Cheaper Upfront: In most regions, particularly Gauteng and KZN, buying is the more cost-effective option as market prices are often below the current replacement/build cost.
- Convenience and Speed: You can move in within a few months, avoiding the long and uncertain timeline of a construction project.
- Established Neighbourhoods: Existing homes are often in mature areas with developed gardens, amenities, and a wider choice of prime locations.
Cons of Buying an Existing House
- Maintenance and Hidden Costs: Older homes can come with unexpected repair costs for plumbing, roofing, or electrical systems, and may require expensive energy-efficiency upgrades.
- Less Personalization: The layout and design are fixed. Customizing it to your taste requires additional, often disruptive and costly, renovations.
- Transaction Costs: You must pay transfer duty (on properties over R1.21 million), attorney fees, and bond registration costs, which can add 5-10% to the purchase price.
Market Trends Influencing Costs in 2025
Several key market conditions are shaping the build vs. buy decision this year:
- Building Material Costs: After years of sharp increases, material cost inflation is showing signs of cooling in 2025. However, overall costs remain high due to transport expenses and a volatile Rand, keeping construction prices elevated.
- Interest Rates: Easing interest rates in 2024 and 2025 have made home loans more affordable, stimulating buying activity. This also provides some relief on building loans, but the primary benefit is for buyers of existing properties.
- Housing Demand and Supply: Demand is strong in the Western Cape, driven by semigration, which keeps property prices high. In contrast, the market in Gauteng is more sluggish. A general lack of new housing construction nationwide means a limited supply of new builds, often favouring the purchase of well-located existing homes.
Bottom Line: Is It Cheaper to Build or Buy in 2025?
For most South Africans in 2025, buying an existing house remains the cheaper option, particularly in Gauteng and KwaZulu-Natal. The upfront cost of construction, driven by high material and labour expenses, typically exceeds the market value of comparable existing homes.
However, the 'best' choice is not just about the initial price tag. If your priority is budget and speed, buying is the clear winner. If customization, energy efficiency, and a brand-new, low-maintenance home are your goals, building could be the right long-term investment, especially if you already own land or are in a high-priced market like Cape Town where the cost difference is smaller.
