South Africa’s low building costs drive surge in property investment

SOUTH Africa has emerged as one of the most affordable countries in the world to build a home, presenting a compelling opportunity for prospective homeowners and investors amid rising global construction costs.

With competitive land prices and lower building expenses compared to many international markets, the country is attracting attention from both local and foreign buyers seeking value for money.

“South Africa offers some of the most competitive land and building costs globally, and the KZN South Coast is a prime example of the value to be found here,” said Reece Daniel, developer of Serenity Hills, an eco-focused estate. “Those who choose to purchase a plot and build in secure estates are getting incredible value for their money.”

According to the Turner & Townsend International Construction Market Survey 2024, average construction costs in Johannesburg stand at R17 791 per square metre, with Cape Town slightly higher at R19 589 per square metre.

The survey found that these figures are significantly lower than those in other developing nations, such as Ho Chi Minh City, Vietnam (R20 021 per square metre), Lagos, Nigeria (R27 716 per square metre), and Harare, Zimbabwe (R35 868 per square metre). In contrast, New York tops the list as the world’s most expensive city for construction at R103 016 per square metre.

The affordability of building in South Africa is further enhanced by additional financial benefits. “There is also less financial outlay needed as there are no maintenance expenses or home inspections, so this makes buying land a great entry point into real estate for new investors,” Daniel said. The absence of transfer duties and lower municipal rates based on property values add to the appeal for buyers.

The South African property market is experiencing renewed optimism, with consumer confidence reaching its highest level in a decade, according to the Absa Homeowner Sentiment Index. In the fourth quarter of 2024, 87% of buyers expressed positive sentiment about the future of residential property, reflecting growing interest in purchasing and investing.

This uptick in confidence comes amid a backdrop of resilient demand, particularly in regions like the KwaZulu-Natal (KZN) South Coast, which is known for its relatively low cost of living and desirable coastal lifestyle. Developers in the area are capitalising on this trend by offering competitively priced land within secure estates.

Developments such as Serenity Hills are drawing attention not only for their affordability but also for their focus on sustainability and community living. Residents who incorporate energy-efficient features into their homes have reported reduced utility and running costs. Additionally, inclusive levies provide access to amenities such as hiking and biking trails, a clubhouse, and conservation areas spanning 70 hectares.

“The KZN South Coast is, in itself, a comparatively affordable region with residents benefitting from the relaxed coastal lifestyle without the higher cost of living,” Daniel said. “It’s about providing lasting value — not just a beautiful home, but a more affordable way to live in the long run.”

Community-focused initiatives, including regular events and local businesses like The Packshed Restaurant and The Sweet Gang & Friends Farm Stall, contribute to the area’s appeal. These amenities foster a sense of belonging among residents while supporting a holistic, family friendly environment.

As interest in developments like Serenity Hills grows, opportunities are becoming increasingly scarce. Only a limited number of plots remain available in Phase 1, prompting developers to encourage interested buyers to act quickly. Industry experts warn that the combination of affordable building costs and high consumer confidence may lead to increased competition in the coming months.

For now, South Africa’s property market continues to offer a rare blend of affordability, natural beauty, and lifestyle appeal. While global markets grapple with soaring costs and economic uncertainty, South Africa stands out as a destination where investors and homeowners can achieve significant value without compromising on quality or location.

With global interest in South African real estate on the rise, analysts predict sustained growth in the sector, driven by both domestic and international demand. For those considering entering the market, the current climate presents a unique window of opportunity — one that may not last indefinitely.