It’s cheaper to buy an existing house than to build one

Most people would argue otherwise, but that is the truth. In fact, you can buy two houses for the price of building one.

According to the latest ABSA housing Review it was R610 600 cheaper to buy an existing house than to build a new one in the first quarter of this year.

The average nominal price for a new house was about R1 720 100 while the cost of a similar existing house was about R1 109 500.

With the R610 600 you could buy a house in the affordable housing category and remain with enough change to fully furnish the house and even buy a good second hand car. 

The average price of a house in the affordable category-houses of between 40 and 79m²- was R515 000 in the first quarter of this year.

Factors that impacted building costs were material costs, equipment costs, transport costs, labour costs, developer and contractor margins and the cost of developing land for residential purposes.

But despite this, the growth in residential building plans passed last year was higher than that of 2011.

The growth was 8.5 percent in 2011 and 12.3 percent in 2012.

There was a decline in growth for non-residential plans approved.

The growth went down from 20.3 percent in 2011 to 8.2 percent last year.