Building Costs

To determine the costs involved in building a house is no easy task, simply because of economical phenomena like inflation and price escalation. There are so many different factors affecting the cost of building a house, you just as well ask yourself how much does a car cost? The prospective house owner should therefore at least be aware of the different costs involved when building a house:

The cost of the property itself can vary considerably and many factors can play a role, including location, slope, view, zoning etc. Fact of the matter is, you pay for what you get.

Apart from the purchase price of the stand, the property must be registered in the buyer's name. All property in South Africa is registered by the central authority in the Deeds Office, and transfer of ownership must also be registered there, by means of a Transfer Deed. This is done by a competent person, usually a lawyer, and a transfer fee is payable, as well as a fee to the lawyer. If a prospective owner of land can not afford to buy the property for cash, he/she can apply for a bank loan to buy the property. This is called a mortgage bond, because the financial institution offering the bond will take the property as security, should the owner be in default of payment. This mortgage bond must also be registered in the Deeds Office as Mortgage Deed, and a mortgage registration fee is payable. prefer not to list transfer fees and mortgage bond registration fees here, due to the varying nature thereof. Prospective owners are advised to contact a proper qualified person in this regard.

Before building work can commence, the stand must be provided with services connection points. This includes connection points for water, sewer and electricity. The costs for these connections vary amongst local authorities, and will be provided by the local authority on request.

The next cost is that of the building plans and the approval thereof. The prospective home builder can either draw up his/her own plans, or pay somebody else to do it, or opt for the easiest way, namely to buy the plan of a dream house right here on the website! This is our business, and customers can choose from a wide variety of architect-designed house plans, at extremely competing prices. Apart from the cost to obtain a suitable building plan, the next cost involved is the plan approval fees payable to the local authority. It is not possible to list those cost here, because it tends to vary considerably amongst local authorities.

The actual building costs are by far the main component of the total costs. This usually consists of material costs and labour costs. Due to the continuous escalation in building costs, it is extremely dangerous to list typical building costs here. This may also vary from city to city, and will also vary depending on how luxurious the owner intends to build, and what degree of finishing is required.

For more luxurious houses and finishing, the average unit price can easily be R4,000 to R8,000 per square meter, but it is the opinion of that around R4,300 per m² is a realistic average for a typical suburban house of 200m² during the year of 2008.

During the building process, it may also be required to make use of other professional disciplines that will involve professional fees. An owner might for instance have to use the services of a professional engineer to design a reinforced concrete slab, or a land surveyor to point out the exact erf boundaries. Remember to check out' business directory for a list of companies specialising in design and supply of reinforced concrete slabs.

The last category of costs may include extras such as landscaping and gardening, a pool and paving.

Apart from the actual building costs, and the abovementioned extras, all other costs are pretty much fixed. The only variable element where an owner can save costs, is in the actual building costs. Even here the materials component is pretty much fixed, and one can only try to save on the labour element and that portion reserved as profit for the builder.

If an owner wishes to make use of the services of a building contractor, a profit margin will most likely be added on all material and labour costs. Although this is a safe way to go for the layman, it is also the more expensive. An alternative way is to appoint an architect or building consultant to look after the whole building process, but then the owner must be prepared to pay another mark-up on all costs.

If the owner possesses the necessary knowledge and skills, he/she can become owner builder and appoint his/her own sub-contractors to do the job. Going this way, the owner cuts out all profit taken by somebody else, and will only have to pay the material costs and the labour costs of the sub-contractors. Following this route, one should however take into account the time that will be spent on the project, which means time away from one's own income generating business or work.