Building Costs Per Square Metre in Gauteng Province, South Africa: 2025 to 2026 STATSSA P5041.1 Analysis

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Executive Summary

This comprehensive analysis delves into the private building sector within South Africa’s economic heartland, Gauteng Province, for the first four months of 2025. Based exclusively on the official “Selected Building Statistics of the Private Sector” report (P5041.1) published by Statistics South Africa, this article provides a critical examination of building activity, costs, and trends.

The data is bifurcated into two primary streams: building plans passed (an indicator of future construction intent and investment) and buildings reported as completed (a measure of actual finished work entering the economy).

The overarching theme from the data is one of significant contraction in the planning phase, particularly in the residential sector, which saw a -27.7% decline in the value of plans passed year-on-year. However, the completion data tells a slightly less severe story, with the value of completed residential buildings down -19.6%. This suggests a pipeline of projects from previous periods are still being finished, but new investment is faltering.

Section 1: Analysis of Building Plans Passed (Intent to Build)

The “building plans passed” data represents applications that have received official approval from larger municipalities, signaling intended investment and future construction activity. It is a leading indicator for the health of the construction industry.

Table 1: Building Plans Passed by Larger Municipalities at Current Prices by Type of Building: Gauteng (Jan – Apr 2025)

Source: STATSSA P5041.1, April 2025, Table 16

Category of Building	Type of Building	Measuring Unit	Jan – Apr 2025 (Quantity)	Jan – Apr 2025 (Area m²)	Jan – Apr 2025 (Value R’000)	Cost per m² (R)
Residential Buildings	Dwelling-houses < 80m²	Number	751	228,098	2,233,645	9,793
	Dwelling-houses >= 80m²	Number	1,321	92,610	1,112,792	12,012
	Flats and Townhouses	Number	–	383	2,932	7,655
	Total Residential	R’000	2,072	321,091	3,349,369	10,430
Non-Residential Buildings	Office and Banking Space	m²	–	23,907	292,698	12,242
	Shopping Space	m²	–	19,372	228,520	11,794
	Industrial and Warehouse Space	m²	–	192,243	1,390,686	7,233
	Other Non-Residential Buildings*	m²	–	5,508	55,391	10,055
Total Non-Residential		R’000	–	241,030	1,967,285	8,162
Additions and Alterations	Dwelling-houses	m²	–	164,699	1,679,717	10,200
Additions and Alterations	Other Buildings*	m²	–	63,204	570,261	9,023
Total Additions & Alterations		R’000	–	227,903	2,248,978	9,868
GRAND TOTAL		Total at Current Prices	–	–	7,906,127	–

*Note: Other residential buildings (e.g., hotels, hostels) and internal alterations are included in value but not fully in area calculations, hence the separate “Total Residential” calculation.
The total number of residential dwellings is 751 + 1,321 = 2,072. The total area for residential is 228,098 + 92,610 + 383 = 321,091m². The total value for residential is 2,233,645 + 1,112,792 + 2,932 = 3,349,369.

1.1 Residential Buildings: Plans Passed Analysis

The data reveals a stark decline in residential development intentions. The total value of residential plans passed for Jan-Apr 2025 was R3.35 billion, a sharp decrease from the same period in 2024.

Average Cost of a New House: Calculating an overall “average house” is complex due to the mix of small houses, large houses, and flats. However, by dividing the total value of plans for dwelling houses and flats (R3,349,369,000) by the total number of units (2,072), we get a broad average cost of approximately R1,616,000 per dwelling unit planned in Gauteng.

Average Cost Per Square Metre: The more accurate metric for cost comparison is the rate per square metre. For all planned residential buildings, the average cost is R10,430/m².

Dwelling-houses < 80m²: These smaller, likely more affordable homes, have a lower cost per metre at R9,793/m². This suggests the use of more cost-effective materials and simpler finishes.
Dwelling-houses >= 80m²: Larger homes command a higher rate of R12,012/m², reflecting more complex designs, higher-quality materials, and additional features (e.g., multiple bathrooms, higher-end finishes).
Flats and Townhouses: While the sample is small for this period, the cost per m² is calculated at R7,655/m². The economies of scale in multi-unit developments typically lead to a lower cost per unit area compared to single-family homes.

1.2 Non-Residential Buildings: Plans Passed Analysis

The non-residential sector shows a mixed but overall negative trend, with a total value of R1.97 billion, down -36.5% year-on-year. The cost per square metre varies dramatically by building function.

Office and Banking Space: At R12,242/m², this is the most expensive non-residential category to build, requiring high-quality finishes, advanced IT infrastructure, climate control systems, and often prestigious facades.
Shopping Space: Retail construction is also costly at R11,794/m², driven by the need for large open spans, high-quality flooring, lighting, and facade treatments to attract customers.
Industrial and Warehouse Space: This is the most cost-effective sector to build at R7,233/m². These buildings prioritize vast, clear-span space over finishes, requiring simple structures, basic services, and durable but inexpensive materials like precast concrete and steel cladding.
Other Non-Residential (Schools, Churches, Hospitals): This diverse category averages R10,055/m². The cost can vary widely within this group, with hospitals being far more expensive than a basic community hall.

1.3 Additions and Alterations: Plans Passed Analysis

This sector remains robust, with a total planned value of R2.25 billion. Interestingly, the cost per square metre for alterations is very much in line with new construction.

Alterations to Dwelling-houses: Costing R10,200/m², alterations are as expensive as building new. This is due to the complexity of working within an existing structure, potential for unforeseen issues, and the higher cost of smaller-scale works.
Alterations to Other Buildings: Slightly lower at R9,023/m², but still significant.

Section 2: Analysis of Buildings Reported as Completed (Actual Construction)

The “buildings completed” data reflects work that has been finished and signed off, representing actual economic activity and the addition of new built stock. This data often reflects decisions and plans approved in prior periods.

Table 2: Buildings Reported as Completed to Larger Municipalities at Current Prices by Type of Building: Gauteng (Jan – Apr 2025)

Source: STATSSA P5041.1, April 2025, Table 26

Category of Building	Type of Building	Measuring Unit	Jan – Apr 2025 (Quantity)	Jan – Apr 2025 (Area m²)	Jan – Apr 2025 (Value R’000)	Cost per m² (R)
Residential Buildings	Dwelling-houses < 80m²	Number	934	45,326	316,303	6,978
	Dwelling-houses >= 80m²	Number	614	164,964	1,611,578	9,770
	Flats and Townhouses	Number	1,083	92,328	1,009,120	10,929
	Other Residential Buildings²	m²	–	1,383	10,587	7,655
	Total Residential	R’000	2,631	304,001	2,947,588	9,696
Non-Residential Buildings	Office and Banking Space	m²	–	7,313	90,727	12,405
	Shopping Space	m²	–	25,851	172,226	6,662
	Industrial and Warehouse Space	m²	–	128,651	856,785	6,659
	Other Non-Residential Buildings³	m²	–	15,453	136,341	8,823
Total Non-Residential		R’000	–	177,268	1,256,079	7,086
Additions and Alterations	Dwelling-houses	m²	–	36,840	381,202	10,348
Additions and Alterations	Other Buildings⁴	m²	–	27,239	273,506	10,040
Total Additions & Alterations		R’000	–	64,079	654,708	10,218
GRAND TOTAL		Total at Current Prices	–	–	4,858,375	–

The total number of completed residential dwellings is 934 + 614 + 1,083 = 2,631. The total area for residential is 45,326 + 164,964 + 92,328 + 1,383 = 304,001m².

2.1 Residential Buildings: Completed Analysis

The value of completed residential buildings was R2.95 billion for the period. The cost per square metre for completed work is notably lower than for plans passed.

Average Cost of a Completed House: The total value divided by the total number of units (2,631) gives an average cost of approximately R1,120,000 per completed dwelling. The significant difference from the “plans passed” figure suggests a higher proportion of smaller/less expensive units (flats and small houses) were completed in this period.

Average Cost Per Square Metre: The overall rate for completed residential buildings is R9,696/m².

Dwelling-houses < 80m²: R6,978/m². This completed cost is significantly lower than the planned cost for similar homes, which could indicate cost-saving during construction or a different mix of projects being completed versus those being planned.
Dwelling-houses >= 80m²: R9,770/m². Again, this is lower than the planned rate, reinforcing the trend.
Flats and Townhouses: R10,929/m². Interestingly, this is higher than the planned rate and higher than large houses, which may be due to the inclusion of common area costs (foyers, stairwells) and shared services in the gross floor area calculation.

2.2 Non-Residential Buildings: Completed Analysis

The completed non-residential sector was valued at R1.26 billion. The cost per square metre for completed buildings is generally lower than for planned ones, except for offices.

Office and Banking Space: R12,405/m². The high cost aligns with expectations and is slightly higher than the planned rate, confirming the premium nature of this asset class.
Shopping Space: R6,662/m². This is surprisingly low compared to the planned rate and could be due to the completion of several smaller, simpler retail units or bulk discount warehouses during this specific period.
Industrial and Warehouse Space: R6,659/m². This is consistent with the low cost seen in the plans data.
Other Non-Residential: R8,823/m².

2.3 Additions and Alterations: Completed Analysis

The value of completed alterations was R654.7 million. The cost per square metre (~R10,200/m²) is high and consistent with the plans data, confirming that alteration work is as expensive, if not more so, than new build on a per-metre basis.

Section 3: Comparative Analysis and Conclusion

3.1 Plans Passed vs. Completed: A Tale of Two Pipelines

A direct comparison between the two datasets reveals critical insights into the Gauteng construction industry’s state in early 2025:

Residential Slowdown: The value of plans passed (R3.35bn) is only marginally higher than the value of completions (R2.95bn). Given that plans lead completions by several months, this indicates a severe slowdown in new investment into residential development. The pipeline is being depleted.
Non-Residential Divergence: The value of non-residential plans passed (R1.97bn) is significantly higher than completions (R1.26bn). This suggests a healthy pipeline of non-residential projects that were approved in late 2024/early 2025 and are yet to be completed.
Cost Discrepancies: There is a consistent pattern where the cost per square metre for planned projects is higher than for completed ones, especially in residential. This could be due to several factors:
- Optimism Bias: Developers may over-estimate costs in initial plans.
- Value Engineering: During construction, contractors and developers find ways to reduce costs without sacrificing quality.
- Different Project Mix: The projects completed in Jan-Apr 2025 may have been approved in a different economic climate (mid-2024) with different cost structures than those being approved in early 2025.

3.2 Conclusion: The Gauteng Building Cost Landscape in 2025

The STATSSA P5041.1 data paints a picture of a construction sector under pressure in Gauteng. The significant year-on-year declines in the value of building plans passed, particularly for residential properties (-27.7%), point to constrained developer confidence and tighter credit conditions. However, the completion of projects from a stronger previous period provides a buffer, preventing an even more severe economic contraction in the sector.

For anyone involved in the built environment, the key takeaway is the set of benchmark cost per square metre rates:

New Residential Build: Budget between R9,700/m² and R10,400/m², with higher-end single-family homes exceeding R12,000/m².
New Non-Residential Build: Costs are highly variable. Budget from R6,600/m² for a warehouse to over R12,400/m² for high-spec office space.
Renovations and Additions: Do not assume they are cheaper. Budget at least R10,000/m² to R10,200/m², as the complexity of integrating with existing structures often negates any savings on materials.

These figures, derived directly from official statistics, provide a solid, data-driven foundation for financial planning, feasibility studies, and strategic decision-making in the challenging yet dynamic Gauteng construction market of 2025.