Is it cheaper to build or buy a house in South Africa?

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.

Multiracial couple at real estate agent deciding between building or buying new house.

Building Vs Buying

Estimated Average Property Price in Different Cities*
Provinces Buying Building
Cape Town R5 755 317 R7 016 806
Durban R3 102 022 R4 094 670
Pretoria R2 556 558 R3 323 525
Johannesburg R2 270 915 R2 974 898
Kimberley R1 982 000 R2 536 964
Bloemfontein R1 150 000 R1 496 825
Port Elizabeth R1 100 000 R1 397 159
Polokwane R1 050 000 R1 323 375
*Based on data from Absa, Nedbank, BusinessTech, StatsSA, Property24, EQS, and Ooba

The differences aren't even that big in some places and sometimes you just have to follow your dream and build your own house from scratch.

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 – R15 700
  • Western Cape – R11 240
  • Gauteng – R11 170
  • Northern Cape – R10 420
  • Eastern Cape – R9 190
  • Limpopo – R8 740
  • Mpumalanga – R8 670
  • North West – R8 440
  • Free State - R7 670
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Another analysis looked into low-cost, above average, and high-end houses:
  • Low-cost housing: +/-R5 000 per square metre
  • Middle class, market quality house: R8 000 - R13 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.

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