Buying vs. building a home

houseMost home buyers spend a great deal of time researching, thinking about or developing their dream home. And rightly so. Every buyer will have different requirements on their dream home checklist. Location, house layout, maintenance, market trends, taxes and levies all play a role in the house hunt. But every buyer will have to make a decision about whether they want to buy or just build their own home. Each direction comes with its pros and cons.


The two major advantages of buying an already established home are convenience and cost. The process is relatively simple. Once you’ve been pre-approved by your bank, you can shop around a little, picking out a home that best suits the space you’re in. An estate agent can greatly help fast track the process, but typically, once an offer has been accepted, you’d be able to move in within a few months.

Convenience of buying

Sure, the process might seem a little intimidating with all its steps – asset finance, property shopping, to-ing and fro-ing with price negotiations, home inspections – but the convenience of moving into an already existing home almost immediately is one of the more compelling arguments for buying. This is especially true for those buyers on a timeline, such as a new job or with children starting at a new school.

Buying an existing home will let you move into an already established neighbourhood, with its own infrastructure – schools, shops, neighbours and landscape. And most of the land in the central areas of South Africa’s cities is already developed, so if you’re wanting to be central, you’ll probably need to buy.

Costs of buying

A transfer duty is also payable on homes of over R600 000 from a natural person. If you’re going to buy from a developer, then the price of the property will include VAT and probably a developer’s levy. The VAT is payable to SARS by the developer, whereas any transfer duty is payable to SARS by you, the buyer. The more expensive the property, the greater the cost of the transfer duty.


Disadvantages to building

Building a home obviously doesn’t offer the same convenience purchasing a house would. You’re going to have to find new land, in a decentralised neighbourhood; it’ll take time – think about the architectural plans, which’ll need to be passed off by the neighbours, municipality and a building inspector; and the responsibility falls on you to choose every element of your dream home.

Another major drawback is that you’ll more than likely have to rely on a contractor to see the job through to completion and to stick to negotiated timelines. If your contractor is slow or sloppy, you’ll incur significant penalties and costs will soar.

In reality, building usually takes a lot longer than projected and might leave you with the responsibility of two bonds – a nightmare for anyone.


But there are certainly some major advantages. Building your own home means precisely that – it’s yours. You can design and build everything to your wants, needs and specifications. From what colour carpets you’ll install, to the type of electrical plugs you’ll use, everything will be your baby. And there’s a definite sense of sentimentality and pride that comes with that.

Building will also mean that your home will reflect modern living. High-speed Internet, contemporary building styles, the latest spatial and acoustic trends – it’ll all be up to date and brand new. This’ll mean easier living once the project is finished. And lastly, all of your construction materials will be up to the latest safety standards, providing definite peace of mind.

There are pros and cons to each method, but if you’ve got the money, the time and the perseverance, then building a home may leave you the most satisfied with the final product. If not, then perhaps a longer term strategy of buying and renovating to your liking is a better option.