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Published September 16, 2021
Updated September 16, 2021

How Much Does It Cost to Build a House?

The average cost to build a new house in Canada’s major cities ranges from $90 to $265 per square foot. Factors that affect cost include location and materials.

Have you ever wondered, how much does it cost to build a house? It can be a pricey venture, but the satisfaction that comes with building a house from the ground up can be worth it. Understanding the costs involved will help you decide if building a home is right for you.

How much does it cost to build a new house in Canada?

According to Altus Group’s 2021 Canadian Cost Guide, you can expect to pay the following, per square foot in Canada’s major cities (not including the cost to acquire land).

  • Vancouver: $145 – $265
  • Calgary: $125 – $195
  • Edmonton: $125 – $195
  • Winnipeg: $120 – $185
  • Toronto: $140 – $240
  • Ottawa: $120 – $200
  • Montreal: $105 – $175
  • Halifax: $90 – $150
  • St. John’s: $115 – $150

What factors affect the cost of building a house?

While it’s a good idea to understand how much things will cost per square foot, you need to know how your costs break down. The following are the major factors that affect the cost of building a home.

Land

Purchasing land is arguably the highest cost. If you’re buying a lot that already has a home on it, you’ll need to pay for the destruction of the old house before you start building. If you’re considering a vacant lot, you need to see if it’s flat or sloping as this could affect your overall costs. You might even need to pay to remove boulders and trees before you start construction.

Location

Where you plan to build also greatly impacts price. Higher labour and material costs in major centres mean you will always pay more to build in big cities than in the suburbs or rural areas. The province you build in is also a factor. For example, building in metropolitan areas of Ontario or British Columbia will cost more than in Atlantic Canada.

Type of home

The type and size of the home you plan to build will determine the price. Building a two-story home will cost more than a single story since additional materials are required. If you plan on having many bedrooms and bathrooms, you’ll need to pay more too. Don’t forget about the exterior. If you want a pool, deck and landscaping, you’re going to need to spend.

Contractors

When building a home, you’re going to be dealing with multiple professionals. That could include architects, plumbers, electricians, general contractors and roofers. Naturally, the amount they charge for labour will vary.

Materials used

Every material you choose has a cost. If you’re looking for luxury and top-end finishes, you can expect to pay more. For example, a brick exterior is more expensive than vinyl siding.

Fees and permits

Building a home requires you to pass regulations that are set by the government. Your plans will need to be reviewed, and you’ll need to get a permit before you begin building. Once you start, there will likely be additional inspections to ensure everything is up to code.

How to save money when building a house

Despite all the costs involved with building a home, it is possible to reduce your expenses if you consider the following:

  • Get quotes. Talk to different contractors and find out what their pricing is. Make sure you do additional research on anyone you plan on hiring.
  • Go pre-designed. Although a custom-designed house is appealing, it can be expensive. Choosing a pre-designed home could save you a lot.
  • Be modest. Instead of building a giant home, consider something smaller that will meet your needs. The smaller the house, the less you’ll pay.
  • Don’t go all out. You don’t need to choose top-of-the-line materials for every room. Focus on the things that are most important to you.
  • Save things for later. It’s not necessary to build your dream home in one go. You can install a pool or finish your basement later.

» Is building out of your budget?: You can still get something new if you purchase a pre-construction home from a builder

Can you get a mortgage to build a house?

You’re going to need a way to pay for your new home. Most financial institutions offer new construction loans or construction mortgages. They’re similar to traditional mortgages but usually have a higher interest rate.

You may also be required to have a down payment in the 25%-30% range. It’s a good idea to speak to a mortgage broker early to find out what you’d qualify for.

» FIND OUT: How much mortgage you can afford

How long does it take to build a new home?

Assuming the land is clear and ready to be built on, it takes about 10 to 16 months to construct a new home. Of course, there can be delays for various reasons such as weather, materials, availability of contractors, and financing.

There’s no denying it, building a new house can cost a lot of money and take a long time. If you’re willing to go through the process from start to end, building a house is an incredible feeling.

About the Author

Barry Choi
Barry Choi

Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel. You can reach him on Twitter: @barrychoi.

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