Buying vs building

Buying vs Building a House

buying vs building

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.

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