Building a new house can be a daunting experience, but the end result makes it all worth it. Combining all the features and fittings you want into the perfect home — and doing it all on a budget — can be far from easy.
At the end of the day, if you’re building your own home or an investment property, the key factor that affects your decisions is cost. You want your new home to be as affordable as possible and you don’t want to get ripped off by any dishonest builders or tradespeople who think they can get away with overcharging.
How much does it cost to build a house in Canada?
The average cost to build a house in Canada ranges from $130 to $400+ per square foot for a detached home. The cost varies greatly depending on the location of the home. The price ranges below provide a rough guide of the construction cost per square foot if you decide to build in or near these Canadian cities.
(Note that one of the biggest factors affecting your estimated construction cost is whether you build a predesigned home or a custom-built home; predesigned homes will be cheaper. Additionally, your construction costs will be higher than the amounts shown below if you opt for luxury design elements.)
Calgary: $190 – $300
Edmonton: $130 – $185
Toronto: $220 – $400
Halifax: $90 – $150
Ottawa: $235 -$375
Montreal: $165 – $350
St. John’s: $150 – $350
Vancouver: $200 – $350
Winnipeg: $130 – $350
The costs of building in smaller cities, towns and villages across Canada will likely be slightly less. Remember that these quoted costs also don’t take into consideration the cost of the land you want to build on – as well as any permits you’ll need. All of these additional costs are usually the reason many homeowners renovate an existing property.
How much does it cost to build a house in Ontario?
As you can see from the list above, the cost per square foot to build a house in Ontario is higher than other provinces. As Canada’s largest province by population, with a population growth rate of 9.56% from 2016-2020, Ontario’s new housing market is one of the fastest growing in the country. The cost to build a home in Ontario varies greatly depending on the location of the build. The average cost per square foot for a detached home in the Greater Toronto Area (GTA) is $110 — $400+ (depending on whether you use a predesigned home or a custom build) while in Ottawa the average cost per square foot is $235 — $375. Costs can be much lower in more rural areas compared to the suburbs.
Why does the cost of building a home differ so much between cities?
According the Altus Group, not only do the costs of labour and materials differ between markets, the standards/specification of each building type can differ as well. The cost of these specifications vary between cities.
There are climatic & code variances between cities. For instance, the HVAC system required in Calgary will be different than the HVAC system required in Vancouver.
What other factors affect the cost of building a house?
There is a huge range of factors that affect building costs.
Land. The worksite itself is one of the most important factors in the overall cost of the home. You have to take into account if the land you’re planning to build on is flat or sloping. What’s more, there may be hidden costs like large boulders found under the land that need to be cleared prior to building.
Location. It’s all about location, location, location. Costs can vary greatly depending on if you want to live rurally, in the suburbs or in a major city. Typically, cities will cost the most because metropolitan areas are the most desirable places to live.
Fees, permits and inspection. Government regulations in the construction industry are consistently being reviewed and updated. You’ll find a slew of extra costs when getting every aspect of your home up to code.
Restrictive covenants. There are some instances — mostly with homeowners association or in protected areas — where houses require specific building materials to be used or specific design requirements must be met. These costs will vary depending on the requirements in question.
One story or two. It’ll generally cost more to build a two-story home than a one-story home as there are additional items required for construction. This includes an additional floor, stairs, scaffolding and more.
Materials used. From brick and stone veneer to a lightweight siding such as vinyl, the materials used in the construction of your home will have a big impact on the total cost.
Tradesperson. Hiring each type of professional — electrician, plumber, roofer and so on — play a large part in the cost of your build.
Your house. How many square feet will your home cover? How many bedrooms and bathrooms will it have? Will it be architecturally designed or a production home? Do you want to add a deck, porch or pool?
All of these factors can make a difference of tens or even hundreds of thousands of dollars in the cost to build your home.
Choosing a contractor
The contractor you choose to complete your construction project is the next biggest factor that can have an impact on the overall price. Builders can vary not only in the type of work they specialize in (for example, custom-built homes versus production homes), but also in how much they charge for their work. It’s essential to obtain quotes from several home builders to get an accurate idea of construction costs, as well as which contractor offers the best value for money.
Here are some important questions you should ask any prospective builder before enlisting their services:
Are you properly licensed?
Do you have insurance?
What is your building process and why is it like that?
Can you design and build a house to suit the layout of my property?
Do you provide regular updates on contraction progress?
Are the plans and design flexible?
Are there any completed homes you’ve built that I am able to inspect?
Do you have any references?
Finder survey: How much do Canadians of different ages set aside for savings each month (including all household members and all types of savings)?
Response
Gen Z
Gen Y
Gen X
Baby Boomers
$151 to $250
21.02%
14.68%
14.2%
11.32%
$76 to $150
19.32%
12.19%
11.36%
16.35%
$251 to $500
14.2%
22.44%
18.61%
14.47%
$0 (no room in the budget)
11.93%
15.24%
18.93%
24.53%
None of the above
9.66%
4.43%
8.52%
10.06%
Up to $25
8.52%
5.82%
5.99%
5.03%
$501 to $1,000
6.82%
10.25%
9.78%
8.18%
$26 to $75
4.55%
8.03%
7.26%
3.77%
More than $1,000
3.98%
6.93%
5.36%
5.66%
already have a ton in svgs. so not putting away anything
0.63%
Source: Finder survey by Pollfish of 1013 Canadians, August 2023
How do I get an estimate for building a house?
You have two different routes to take to get a ballpark figure of what you’ll spend to build your new home.
Construction cost calculators
There are a number of building cost calculators available online to help you work out your costs. While these calculators are useful to get a very rough idea of how much money to set aside for your new-home budget, they’re a long way removed from an accurate quote.
So before you use them, make sure you’re aware of any assumptions each calculator makes, and take whatever per-square-foot result you are given with a grain of salt.
Getting a custom quote
For a much clearer idea of how much it will cost to build your house, you’ll need to have detailed design and construction plans drawn up and get quotes from several builders. These will take into account all the specifics of your project, from any site requirements to the size, layout and features of the build.
Just make sure you know exactly what is included in the quote from your builder and what may cost extra. For example, site costs, carpets, driveways, landscaping and fencing are often not included in quotes but can add thousands of dollars to the overall cost.
How do you finance the construction of a new home?
If you need to borrow money to build your home, you’ll need to apply for a home construction loan or a self-build mortgage. These loans can be set up to allow you to purchase a vacant block of land first and then build on that land within a set timeframe or to fund the construction of your home if you already own the land.
While down payments vary for new builds, you may be required to pay a higher down payment of 25-30%. Construction mortgages are usually secured by the land plus any improvement value – which means if you default, you’ll lose the land and any improvements you’ve made to it.
There are two types of construction mortgages:
Completion mortgage. Here, the loan isn’t transferred until the project is complete. This means you can usually make changes to the mortgage – such as how much you need – until 30 days prior to taking possession of your home.
Draw or progress-draw mortgage. This type offers up the loan in increments, with a builder receiving the funding once they pass the inspection of that particular stage. To calculate the total amount of the mortgage, the lender will calculate the total amount you’ll need to borrow to pay your builder and then allows access to it at specified times (usually at four different stages throughout the build).
Before you can qualify for a construction mortgage, you’ll need to meet any requirements set out by the lender. Some lenders restrict you to certain builders, while others want the build to be completed within a certain timeframe. Many lenders will need an estimate when it comes to construction costs – including the cost of the land (if it hasn’t been purchased already).
Production homes vs. custom homes
Production home builders are usually major companies that have completely systemized their construction process. The main feature that typically attract people to use a volume builder is their extensive range of floor plans that are already priced out and cater to budgets ranging from standard to luxury.
However, when you choose a production home, every aspect of the build is typically finalized before construction starts. If you’re someone who likes to improvise and change things as you go, you might be happier with a custom built home.
Custom builders are usually hands-on local contractors who pride themselves on the personal quality and uniqueness that they can bring to your home building experience. Custom homes suit people who like the idea of having some level of involvement in the home-building process — though that is completely optional.
With a custom builder, you have the freedom and flexibility to improvise and make adjustments along the way. Although many custom builders may have a range of plans available to inspire you, they generally have no problem working alongside an architect to create unique plans for your new home.
How much does it cost to build a kit home?
If you’re looking for a low-cost option when building a house, you might want to consider a kit home or pre-fabricated home. These homes are designed and built off-site, and then the materials are delivered by truck to your property for assembly. Costs for kit or pre-fab homes can range from $80 – $300 per square foot, or generally, from $120,000 to over $300,000 depending on the floor plan and cost of finishes.
Kit homes can be cost-effective – allowing DIY contractors to do much of the work themselves – and come in a wide range of designs.
However, there are several factors that can affect the cost of a kit home:
The model. A four-bedroom kit home costs substantially more than a one-bedroom kit home. The floor space of your chosen design has a big impact, as does the number of bathrooms and other spaces.
The siding option. Brick, stone, vinyl and more are available.
The site. Sites that are difficult to access or that require levelling could result in increased costs.
What’s included in the package. Some kit-home prices you see quoted online will include nothing but the bare shell of a home, while others will include everything from air conditioning to floor coverings.
Before you purchase a kit home, make sure you get an itemized list of what’s included in the price. Will you just get the bare essentials, or does the price cover everything you need to move into your new home? Will other jobs like site levelling or soil testing cost extra? The last thing you want is a list of unexpected costs that cause a budget blowout – so make sure you know exactly what you’re getting yourself into before handing over any money.
Are kit homes really cheaper than standard homes?
For some people with a flat and easily accessible site, and who have the necessary skills and qualifications to do much of the work themselves, a kit home can be an affordable option. However, it may be possible to find contractors that can build a home for around the same price as a kit home, so it’s important to shop around to compare costs.
The key to deciding whether a kit home is the most affordable option for you is to make sure you’re fully aware of what’s included in the package and what you will have to pay extra for. You may need to pay for soil testing, laying foundations and any basic finishes like flooring, kitchen counters and more Interested in building a tiny house? Learn more here..
Bottom line
From the location of the build, to the features you want in your home to your bank balance, there are a myriad of factors you need to consider before you start building a home. Make sure to research all your options thoroughly and obtain an accurate idea of the total cost involved before construction begins. Decide which kind of financing you need to apply for before building. This will ensure that your new home is ready on time and, most importantly, on budget.
Need to reduce your internet costs or find a faster provider? Here are nine features to help you compare internet service plans and find the best internet provider in Canada — or, at the very least, for your needs.
Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog. See full profile
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Choosing a contractor
