The average cost to build a house in Canada ranges from $120 to $195 per square foot for a detached home. For many Canadians, the dream of building a home is more appealing than just buying one. Building a home comes with many benefits, and if we’re being perfectly honest, some headaches.
What is the cost to build a house in major Canadian cities?
When it comes to the average cost to build a home in Canada, according to Altus Group’s 2021 Canadian Cost Guide, the price per square foot for a detached home in major Canadian cities is as follows:
- Vancouver: $145 – $265
- Calgary: $125 – $195
- Edmonton: $125 – $195
- Winnipeg: $120 – $185
- Greater Toronto Area: $140 – $240
- Ottawa: $120 – $200
- Montreal: $105 – $175
- Halifax: $90 – $150
- St. John’s: $115 – $150
Can I get a Loan to Build a House?
There are Home Construction and Self-Build Mortgages available when building a house. You need a separate loan to buy the vacant land, which usually comes with higher interest rates than a traditional mortgage.
You are usually expected to have a larger down payment that can range between 25–30%. Your construction mortgage is then used to cover the building costs. These vary in interest rates and terms from lender to lender.
There are basically two types of construction mortgages:
- Completion mortgage: In this case, the loan isn’t transferred until construction is complete.
- Draw or a progress-draw mortgage: The builder draws money in increments as the home is built.
They can get complicated, so speak to a mortgage broker or your bank to discuss your options so that you make the right choice for your needs.
How Long Does It Take to Build a House?
Time is tricky to call as there are so many working parts. However, on average it takes from 10 to 16 months to build a house, assuming everything goes as planned. That doesn’t include clearing the land or tearing down an existing home on the land. It also does not consider the many issues that can arise from bad weather to lack of manpower and delays on materials to challenges with you being able to make decisions in a timely manner.
How to Reduce the Cost of Building a House?
The best thing about building a house is that you can control the budget to save on overall costs – or at least try. Here are some pro tips on how you can save money:
Consider several contractors to bid on the project. Keep in mind that the cheapest builder is not always the best. There’s often a reason that a contractor is coming in low, and it’s typically that they sacrifice deadlines or cut corners on quality. Do your research and make sure you approach contractors with experience and outstanding reviews and ratings.
Choose Existing Home Designs
Consider going with pre-designed choices from a library of designs offered by experienced home builders.
Design a Smaller Home
This one seems obvious, but the smaller the home, the less it will cost. Editor’s note: a reader pointed out that smaller homes can actually most more per square foot! According to him, “The larger the square footage, we still need the same items for the home, but they are now stretched out over a larger square footage.” Makes perfect sense! Consider what you need and what you can afford to set a realistic budget. Once you get estimates, you can then see if there’s any wiggle room to upgrade in square footage, the number of bathrooms, and so on. Open floor plans make the most of small spaces. They also save a ton on materials that affect the cost, with fewer walls, electrical, plumbing, doors and other features.
Your lifestyle will play a role in the home you plan to build. Do you entertain often? Do you have kids, or are you planning a family? Do you have overnight guests? Do you work from home? Do you work out at home? Do you love cooking? How many cars do you have? How much storage space do you need to accommodate your hobbies? All of these questions help you determine where you need to invest extra money and where you can save.
Save on Aesthetics
The style of home you choose will impact the cost in a major way. If you’re not married to a particular style, consider going industrial or rustic as these looks are more forgiving. You can get away with lower costs on the interior finishes without sacrificing the look of your home.
Lend a Hand
Great savings on labour costs can be found by doing some of the work yourself. Some of the easiest things to take on are painting and installing light fixtures. Handier people will often install their flooring or kitchen cabinets once all the plumbing and drywall is complete.
There are some areas where you might get better deals than your contractor can give. Those can include things such as HVAC systems and water heaters, so don’t be afraid to tell your contractor you want to shop around.
Reclaim and Recycle
There’s a lot to be said for reclaimed and recycled items. They are eco-friendly, add character and can also save a lot of money. There are many salvage yards and shops as well as charitable organizations like Habitat for Humanity Restore where you can hunt for everything from doors and windows to kitchen cabinets and bathroom vanities.
Don’t Skimp on Important Details
Make sure you don’t sacrifice on the important details that will save you money down the road, such as proper insulation, windows, doors, and roofing.
Are There Other Options to Custom-Built Homes?
A home renovation is always an option when it comes to getting your dream home. In most cases, you can reduce construction costs as this is not a complete re-build. When you build a new house, you can also look for smaller homes on large plots of land and use them as your base to build your dream home. The large land allows you to increase the square footage. Of course, you can also tear the existing home down and opt to build a new house.
There’s always the new-build route in a subdivision. You are looking at a cookie-cutter design and high prices when you want to make any upgrades for a more customized look.
Although building a home can prove to be affordable, it does also come with its fair share of challenges.
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