With so many options to choose from, more prospective homebuyers are weighing up whether it’s better to build, buy off-plan or opt for an existing property.
While it comes down to personal preference, there are still numerous factors to consider, including location, customisation options, and long-term value. And in a tough economic climate, one of the most important considerations comes down to cost.
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Comparing the Three Main Property Options
This is where analysing costs and weighing up the pros and cons of each option comes into play.
Pros of Building
- The ability to design a new home to your exact specifications and preferences.
- Reduced maintenance and energy costs due to newer fittings.
- Tax benefits, such as the ability to claim depreciation after a certain number of years.
- The feeling of knowing that your home is unique and will stand for future generations.
Cons of Building
- Waiting months for the home to be completed.
- The high probability of costly delays and complications.
- The risk of unreliable contractors.
- Unforeseen costs – here, we recommend factoring in an additional 20%.
Pros of Buying an Existing Home
- A far quicker process from purchase to move-in date, usually around three months.
- An existing home is more likely to be better located than vacant land, meaning proximity to schools, grocery stores or other conveniences.
- A new home may already have luxury add-ons, such as a pool or a designer kitchen, courtesy of the previous owner.
Cons of Buying an Existing Home
- You may need to renovate, especially if the home is older.
- You’ll have to pay expensive bond registration and transfer costs, including transfer duty and conveyancing attorney fees.
- You purchase a home voetstoots, which means that the seller is not liable for any defects, patent or latent.
Buying Off-Plan Offers the Best of Both Worlds
For those who aren’t keen on the idea of purchasing a ‘lived-in’ home but who want to skip the hassle of managing their building project, buying off-plan provides a good compromise.
Buying ‘off-plan’ means buying a property before it has been built and instead basing your decision on the developer’s vision and the architect’s drawing. Benefits include no transfer duty, living within a community and all modern finishes and energy efficiency that comes with a newly built home.
Which option is the most cost-effective?
Building a new home from scratch is estimated to be 20 to 30% more expensive, on average, than buying an existing property. According to wisemove.co.za, building a house in 2025 in South Africa ranges from R6,500 per square metre for a small economic home to upwards of R20,000 per square metre for higher-end homes.
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One must also consider the cost of renting a home while waiting for the new one to be built, as well as the possibility of complications and costly delays throughout the construction process, which can exceed the budget.
The general rule of thumb is to factor in an additional 20% for breakages, delays, cost escalations, etc. However, building a home does offer upfront savings as it eliminates the need to pay transfer duty.
The cost of purchasing an existing home varies based on location and property type, with additional standard costs, including bond registration and transfer costs, transfer duties, a deposit, potential repairs and maintenance, and home insurance.
Finally, while buying off-plan does not require transfer duty, buyers will still need to pay VAT.
Ultimately, it’s currently cheaper to buy
Considering all these factors, we still believe that in most cases, it is still more cost-effective than building one.
Despite a healthy increase in the HPI, lower interest rates and surplus stock on the market in most parts of the country mean that buyers have the upper hand.
Whether you choose to build or buy ultimately is an emotional decision based on your life stage, budget, and timeline of when you need to find new housing.
Would you build or buy?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
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