Buying vs Building a House
Buying vs building
With buying vs building, it is a generally held wisdom that buying is approximately 20% cheaper than building.
Buying an Existing Home
Advantages of buying:
- Security: it is less likely that there are vacant stands in the vicinity.
- Established neighbourhoods have the necessary major arterial routes and amenities, e.g. a central business district, public transport, schools and shopping centres.
- It is easier to determine current and future property values in an established area.
- Older houses usually have larger rooms and larger stands.
- You can get expert advice on patent and latent defects to the house. A home inspector will assist you.
Disadvantages of buying:
- The area you buy in may be in decline.
- Older properties are bought with the ‘voetstoots’ clause. There is no recourse to a warranty.
- Costs for repairing latent defects could be exorbitant.
- Design and finishes may not be to your taste.
- Renovation costs may exceed overall value of the property.
Building a New Home
Advantages of building:
- When buying a home from a developer the price includes VAT. As a result transfer duty falls away.
- You have a 5-year major structural defect warranty and a 1-year roof leak warranty. All building contractors registered with the National Home Builders Registration Council (NHBRC) must comply with this regulation.
- The overall design of the house is according to your needs and taste.
- Maintenance costs are low.
Disadvantages of building:
- New developments and vacant stands are usually on the outskirts of major urban areas. Security could become an issue, as well as access to major arterial routes and amenities.
- Costs may escalate architect and engineer fees, land excavation and land preparation costs etc.
- Construction projects often have time overruns.
- You have little impact on the design of other constructions in the vicinity.
- Stand sizes are usually smaller.
- Project managing the construction of the house is a time consuming and stressful endeavour.