Understanding Building Costs, avoiding pitfalls
Prepared by independent SAPAC Reporter
Article Classification: Public Awareness
Press here for Afrikaans Article [LINK]
Discipline: Architecture, Engineering, Building, Electrical, Plumbing
Areas: Southern Africa, Northern Cape, Western Cape,Cape Winelands, Free State, Gauteng, North West Province, Limpopo, Mpumalanga, Natal
How much does a new build cost?
It is evident that building expenses have significantly risen in recent years. As of 2023, the costs for constructing a new house can range from R12,000 to R20,000 per square meter (higher specifications can exceed R25,000). This price is determined by summing up all the final construction expenses (excluding professional services and administrative fees) and dividing the total by the size of the house in square meters.
Naturally, this serves as a general reference, but using a base figure of R16,000 per square meter can assist in estimating the affordable size of the building. For instance, a 300m2 house could cost approximately R5,000,000 to build. It is important to factor in the land value, professional fees, and holding fees (such as rent during the construction period, rates, etc.).
However, it is possible to build at a lower cost. Under the best-case scenario (which includes easily accessible site conditions, effective budget management, affordable fixtures, self-project management, and a simple design), a 300m2 house could cost around R4,000,000 (when service fees are included). However, achieving this requires diligence in researching, comparing prices, and employing resourcefulness. Ideally you will opt into contacting SAPAC to put you in contact with a QS and Engineer.
It is important to note, that going the for the cheapest option, is down out right a hazard towards yourself. Numerous times you might have heard of issues experienced. And going for the cheapest option normally works out more with regards to legal fees etc.
What are the main risks with regards to building costs
Challenging soil conditions, complex roof designs, the inclusion of basements, extensive property boundaries requiring walls, and the use of expensive fittings like high-end solid wood finishes or kitchens can quickly escalate construction costs. They are however an important factor to consider.
To mitigate cost uncertainties, it is advisable to obtain multiple quotes on SAPAC.co.za before commencing any building project, or even better, you should and must hire a quantity surveyor (We call them a QS) to conduct a thorough cost analysis. Additionally, it's important to recognize that the actual structure represents only a portion of the overall expenses. The inclusion of finishes is crucial to obtain a comprehensive understanding of the final budget.
If you wish to minimize major cost fluctuations, opting for an established and reputable builder on SAPAC.co.za who can provide a fixed price quote is recommended (although this may be more expensive, it can provide long-term security,). It's worth noting that certain builders have the potential to go bankrupt, leaving projects unfinished. To safeguard against this, use SAPAC.co.za to make your selection. It is customary to arrange stagger instalments payments throughout the construction process after a structural engineer has been on site. See this [LINK] - How to build a home - SAPAC.co.za
The unknown issues in building costs
One of the most significant uncertainties in a new construction project is the condition of the soil. Nowadays, numerous architects and structural engineers emphasize the importance of conducting a geotechnical report to uncover any unexpected challenges beneath the ground before commencing foundation work. It is astonishing to discover that there are numerous locations in South Africa with unfavourable building conditions that may necessitate the use of raft foundations (suspended with additional support) or require soil refilling and compaction. It is therefore strongly advisable to perform a geotechnical report.
See this [LINK] - How to build a home - SAPAC.co.za
Undertaking any underground construction, including partial or full basements, can be an extremely costly endeavour. Unforeseen issues such as the presence of underground water can lead to significant financial burdens, with basements potentially costing millions. If you have a limited budget, it is highly advisable to avoid such projects altogether.
Lastly, it is crucial to ensure that all administrative tasks and fees, including those related to NHBRC (National Home Builders Registration Council), safety files, and council submissions, are kept up to date. Failing to comply with regulations can result in fines, prolonged site closures, and the inability to obtain an occupation certificate. See this [LINK] - How to build a home - SAPAC.co.za
Obtaining building quotes in South Africa
According to legal requirements, any building contractor you engage must be registered with the NHBRC (National Home Builders Registration Council). Additionally, it's important to note that a lower-priced quote may result in a more challenging construction process – and it can work out more per square meter in legal fees.
In South Africa, when soliciting tenders or quotes for a construction project, you typically have one of the following options. And to make it a seamless process you may use the SAPAC.co.za platform. Simply get in contact with SAPAC through this link https://bit.ly.SAPACHelp and the SAPAC office will place your tender out for quotes. Whereby all Subject matter experts will contact you and arrange the required date, time and place to meet.
In this approach, you provide detailed plans and a schedule of finishes (such as flooring, ceilings, and wall finishes) to a medium or large-sized construction company. They will then offer you a fixed price to handle the entire process of building your house from start to finish, essentially a "turnkey project."
As unexpected delays and challenges can arise during the construction process, the fixed price is likely to account for potential unforeseen costs. To mitigate their own risk, the construction company may allocate additional funds for quantity surveyors, which provides added assurance but also increases the overall cost. It is highly advisable to get a QS involved. Including a structural engineer.
If you opt to have the architect oversee the project, they may recommend experienced contractors to maintain their own professional reputation. However in this instance it is advisable to get those contractors to be double checked by SAPAC.co.za Our office will assist you FREE of charge Press this link to be assisted [LINK]
In this scenario, it is crucial to have comprehensive and watertight contracts. It is also advisable to establish a strict timeline, including provisions for late completion penalties or bonuses for timely completion. Most importantly, instalment payments should only be made upon reaching pre-agreed milestones. Insist on stagger payments after an engineer has performed the required inspection at the different stages. Your success rest with a QS and by utilising a structural engineer.
Project management and subcontractors
A growing number of smaller building contractors now prefer the project management approach. In this arrangement, the building contractor charges you a monthly or daily fee while overseeing your construction project with a team of subcontractors who are directly paid by you. This means less risk for the builder and greater involvement from the homeowner.
Typically, they provide a quote by aggregating individual prices from each subcontracting team (such as plumbers, electricians, roofers, and carpenters) and then manage the construction site on a part-time basis, as they may have multiple projects simultaneously.
However, the lack of a full-time Engineer on-site can be a real drawback.
This option requires more control and input from the potential homeowner, as you will still need to oversee daily material expenditures and subcontractors to some extent. Nonetheless, this approach is likely challenging to hold project managers accountable to their original price or contract since they are working on a daily rate and can potentially take longer or even leave the site if they choose to do so.
To obtain a rough estimate of the cost involved in building a new house, you can see the following categories.
- Land Purchase: The cost of acquiring the land on which the house will be built.
Architectural Design: Fees associated with hiring an architect to design the house.
Be sure to visit https://sapac.co.za for an Architectural professional
Engineering and Structural Design: Costs related to the structural design and engineering services.
Be sure to visit https://sapac.co.za for Engineers and Quantity surveyors.
Building Permits and Approvals: Expenses for obtaining necessary permits and approvals from local authorities.
Be sure to visit https://sapac.co.za for assistance
Site Preparation: Clearing, levelling, and preparing the construction site for building.
Be sure to visit https://sapac.co.za for a plant hire company.
Foundation and Excavation: Costs associated with laying the foundation and excavating the site.
Be sure to visit https://sapac.co.za for a equipment
Construction Materials: Expenses for purchasing construction materials such as bricks, cement, steel, lumber, etc.
Be sure to visit https://sapac.co.za for a equipment
Labor and Construction: Payments to the construction team, including builders, contractors, and subcontractors. Keep records for yourself.
Be sure to visit https://sapac.co.za for a equipment
Plumbing and Electrical: Installation and labor costs for plumbing and electrical systems.
Be sure to visit https://sapac.co.za for Electricians or Plumbers. And if they are not on SAPAC.co.za be sure that they are checked by SAPAC.
Roofing and Flooring: Expenses related to roofing materials and floor installation. |
Be sure to visit https://sapac.co.za for Roofing experts.
Windows and Doors: Costs of purchasing and installing windows and doors.
Be sure to visit https://sapac.co.za for your options.
Interior Finishes: Expenses for interior finishes such as paint, tiles, countertops, cabinetry, etc.
Be sure to visit https://sapac.co.za
HVAC Systems: Costs of heating, ventilation, and air conditioning systems.
Be sure to visit https://sapac.co.za for your HVAC contractor
Landscaping: Expenses for landscaping the surrounding area of the house.
Be sure to visit https://sapac.co.za for your landscaping contractor.
Contingency Fund: A buffer amount to account for unexpected expenses or changes during construction.
Be sure to visit https://sapac.co.za to be put into contact with financial giants that can assist you.
- Miscellaneous: Any additional costs not covered by the above categories. A very important factor to consider.
By using SAPAC.co.za effectively you are establishing security and in knowing that any professional or contractor that forms part of the collective of like minded professionals and contractors is a valued stakeholder in the SAPAC.co.za platform and thus will ensure a proper build. See this article [LINK] How to Build a home using SAPAC.co.za
What to do if there is an issue:
- Call a meeting with the Engineer, Independent inspector and Builder and raise the concerns during the meeting.
- Ask the engineer for input, and then request the builder for input.
- Refer the issue to the independent impartial inspector.
Note from SAPAC for your build
No build is ever the same, it changes with regards to topography and each build has its own elements of challenges. If you experience any problems do come in contact with SAPAC to see how we may be able to assist you with any possible experienced issues. Remember we are here to assist you with the best possible subject matter experts for FREE and that forms apart of the Collective. Each build should be in essence a memorable experience, between you the client, architect and engineer.
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