South African house guide: build or buy?

Leigh Leigh
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When it comes to the South African property market, there are many conflicting opinions out there. Some say its currently a buyer's market, that you should go for it and strike while the iron is hot, others recommend holding off on investing until the Rand is stronger. Others will say now is the time to build, not buy or rent.

The trick is to do what is right for you, depending your current financial situation, the status of your family and where you live. Is building better than buying or vice-versa? There is no answer to that, there only answer is that different solutions work for different individuals. 

Investing in property, however, whether you're building or buying is a great place to put your money. Not only does it mean that you aren't throwing money into rent to pay off someone else's bond but it means that you can live in a home that is truly yours. 

Let's explore the in's and out's of building or buying property.

Process of buying a house

The process of buying a house can be a few short months or over a year, depending on where you are looking to buy. For some, they spot their dream house at their first show day, get their offer approved and are moving in a month later. For others, they spend months and months trawling the property section of the newspapers, viewing awful houses and getting their offers rejected. 

The process of buying a house involves finding a house that you like in an area that you want to invest in. You can scour the classifieds yourself or you can get in touch with an estate agent in the area to help you. Once you've find something that you like, you'll put in an offer to purchase. This needs to be accepted by the current owner of the house and approved by the bank for bond approval. To get bond approval, you'll need to have a steady income and have filled in all of the necessary paperwork. You'll probably also have to put down a deposit of between 10% and 20%.

If all of the above goes according to plan, you need to be wary of transaction fees because purchasing a house is a legal process. 

If you own a house already, you may need to put it on sale to cover the deposit of the house that you want to buy. Your offer to purchase, therefore, may be subject to your current house being sold in time.

Risks of building a house

Building your dream house can be an absolutely incredible experience, leaving you with an architectural masterpiece in an area that you've always wanted to live. And it seems so simple right? Choose a plot of land, draw up architecture plans for what is sure to be the best home on the block and wait for it to materialise.

The reality is that building a house does come with some risks and it is important to be cognisant of them before you go down the building route. 

The first is the hazards of building and construction. Anything can go wrong while your house is being built, such as a builder falling off of a ladder or a painter tripping down the stairs. Because you own the land, you could be held liable for any injury, disability or death that occurs on your property.

Another risk is the credibility of the builders themselves. While there are many reputable builders out there, there are also many who push back deadlines, skimp on using quality materials and don't deliver properly. Some builders can be incredibly negligent, costing you much, much more in the long run. The National Home Builders Registration Council (NHBRC) can assist with this, providing names of reputable builders who are registered with them.

Risk assessment is a very important when you begin building a house, helping you to assess an minimize any potential issues. You may want to get a lawyer's advice on risk management. 

Advantages of building a house

While there are some risks to consider when building a house, if you take the necessary risk assessment precautions and make sure that you use a reputable builder, you could end up with the most amazing house that you've ever owned in your life. 

There are many other advantages to building a house, including the fact that it is completely customised to your needs and wants. This home, by Japanese architects Nakagame, for example, is incredibly unique and built to the specifications of the owners. 

Another advantage is the sustainability and environmentally-friendly factor. By building a house from scratch, you can include all of the green appliances and features that older houses don't have, from the ground up. While most people with existing homes have to spend thousands replacing appliances to go green, you have the opportunity to do it from the get go. 

This point extends to other technological factors such as Wifi.

Process of buying a prefabrecated house

 Wooden houses by Facit Homes
Facit Homes

Timber Clad Exterior

Facit Homes

Prefab houses are becoming increasingly popular, especially in South Africa where there is a huge emphasis on low-cost housing and giving the entire population the equal right to adequate shelter.

The definition of a prefabricated home is that they are specialist dwelling types of prefabricated building, which are manufactured off-site in advance, usually in standard sections that can be easily shipped and assembled.

When buying a prefab, the first step is to understand what size your property is as this will affect what size your prefab home can be. Once you've worked this out, you can get to work ordering a specific size. 

There are many different companies in South Africa that offer prefab homes, showing different types and styles of houses on their websites. Once you've chosen one and ordered your prefab home, construction will begin. 

Risks of buying a prefabricated house

The first obvious disadvantage or risk when it comes to buying a prefab house is that you won't get exactly what you want. Prefab houses are designed already and while you can choose your size and maybe add a feature here or there, you'll mostly be stuck with a design that you have to choose out of a few options.

While the construction of a prefab home may be much cheaper because of the time spent on it and the materials used, there may be extra costs due to the transportation of the prefab home and the final set-up on the actual site. Work out what the costs will be in total and compare them to the costs of building a traditional house before you go ahead or you risk spending money that you hadn't bargained on spending.

Another risk with prefab homes is actually coming up with the money to buy one. It's not that easy to get a loan for one because it's not fixed on-site initially. Speak to your banker about options around this.

Advantages of buying a prefabricated house

 Prefabricated Home by FingerHaus GmbH
FingerHaus GmbH

VIO 302—Eingangsbereich

FingerHaus GmbH

The first advantage of a prefab house is that because they are built offsite and often indoors, their construction is not weather dependent. This means they are often constructed much quicker than traditional homes.

While prefab homes also can get a bad rap for being cheap, they can actually be built much better with materials of higher quality. This home by Fingerhaus, for example, is absolutely beautiful and you'd never know it was prefab from looking at it.

Research also shows that wear and tear of prefab homes is considerably low, which means that they last for a considerable amount of time. This means that you're investing in something long-term.

Another advantage is that prefab homes are energy-efficient and sustainable. Often materials used are recycled, while the carbon footprint in their production is very low.

No matter if you're building or buying, choose something that works for you, your family and your pocket.

Keen to build? Read about: The Cost Of Building A Small House.

Have you ever built your own home? How was the experience? Share with us!
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