Building a House Part 2 – Budgeting

In a previous article which can be found here, I outlined Professional Services such as architect and Engineer and getting plans approved. In this article we will deal largely with Budgeting your home build.


In a previous article which can be found here, I outlined Professional Services such as architect and Engineer and getting plans approved. In this article we will deal largely with Budgeting your home build.

Disclaimer: This information does not constitute legal, professional or commercial advice. Any views, opinions and guidance stated here are provided for information purposes only, and do not purport to be legal and/or professional advice or a definitive interpretation of any law. Anyone contemplating action in respect of matters stated here should obtain advice from a suitably qualified professional adviser based on their unique requirements.

An accurate budget is important when building a house so that you can see what costs to expect in the building process to establish if it is affordable as well as for applying for finance if the build is to be bonded or financed. If you are an owner builder then you will need to collect costs on each facet of the build as opposed to getting a single quote from a builder for the complete job. If a building company will be attending to the whole build then your quote from them should highlight all costs. You should be mindful of the fact that there are often PC amounts (Prime Cost Amounts) included in the quote from a builder and these will cover a certain estimated cost for various items such as taps or tiles for instance. If the taps or tiles you settle on cost twice as much as the builder has allowed in the quote or tender then your quote will be adjusted or varied to accommodate these extra costs. The builder should include a PC Amount which will cover the cost of materials and should not under-estimate them. Often at the point of quoting the exact tile or tap is unknown so a PC amount needs to be used to arrive at an, “as accurate as possible”, estimated total.

One can often apply an average cost per square metre to build rate to arrive at an estimated budget. Currently, 2017, domestic rates to build a house are about R7, 000-00 per square metre. In fact this very rough budget should be done prior to engaging an architect. It is pointless designing a home that will be unaffordable and having to re-design everything to fit your budget.

Broadly speaking the budget can be broken down into the following main items.

  1. Earthworks
  2. Foundations, slab and concrete wet work
  3. Brick work
  4. Roofing
  5. Plumbing
  6. Electrical
  7. Flooring
  8. Windows and Doors
  9. Finishes
  10. Landscaping

To get an accurate cost for each of the above items one can call for quotes from various service providers to see what each item will cost. It is advisable to get three quotes for each item to make sure you are getting fair value. Make sure that each service provider is quoting on the same thing so as not to have distorted figures only to find that cost increases once the build starts. What you are doing here now is a task that the building contractor would normally be doing. The builder will however have more experience in this task and will be able to foresee any problems with the various quotes. So if you’re a owner builder double-check your quotes and make sure you are not going to be unpleasantly surprised when costs escalate.

Allow for variations from the original quote. For various reasons things may change once you start building and costs increase. You want to make sure you have allowed for unexpected cost increases due to events beyond your control or the service providers that you have contracted with. If the build only starts a year after budgeting costs will increase by at least CPIX. If the build continues for two years then the costs that will be incurred two years down the line will need to be adjusted for annual increases at CPIX.

For a full turnkey solution to your building needs please contact us on 031 – 762 1795 or use the contact us form below.

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