How Much Does It Cost to Build a House?

It’s exciting to consider building a new home in Canada, but many prospective homeowners are unaware of the costs associated with building a house from the ground up. While there are many advantages to a new build, such as customization and location choice, there are several financial factors to consider before you break ground. This quick guide provides a general overview of the costs associated with building a house so you can more effectively plan your budget and timelines—and determine whether it’s the right choice for you.

Average Cost to Build a House in Canada

Like any real estate estimate, the cost to build a new home largely depends on the location, the size of the home and property, and the features and fixtures included in the design. Despite these variables, there are some general guidelines for average home prices in Canada. Keep in mind that these prices are for labour, materials, and construction only—and do not include the price of the land, permits, fees, or other associated costs.

According to the 2023 Canadian Cost Guide from Altus Group, the average price for a production-style non-custom single-family detached home in large cities across Canada (per square foot) are:

Vancouver $150 to $275
Edmonton $125 to $200
Calgary $125 to $200
Winnipeg $120 to $190
Ottawa $125 to $205
Greater Toronto Area $165 to $260
Montreal $130 to $190
St. John’s $120 to $155

However, the price of custom-built and architect-designed homes is far higher, with averages in major Canadian cities ranging from $250 to $1090 per square foot.

Standard Costs to Build a New Home

In addition to the general costs of labour, materials, and construction, there are several other major costs to consider before investing in a new home build.

  • Property and Land. Purchasing property, especially in an urban area, is typically the largest expense of new home construction. Rural locations are typically less expensive, but there are other considerations, including rock and tree removal, water/sewage integration, and grading the land to make it suitable for building.
  • Location and Amenities. Where you plan to build your new home is going to greatly impact the overall cost. There are major differences in price between urban and rural properties, as well as premiums on land adjacent to amenities such as hospitals, schools, shopping, and business centres. Proximity to parks, beaches, and leisure activities also affects pricing.
  • Permits and Inspections. Depending on where you choose to build and the type of residence, there are permits required before you break ground. From local bylaws and building codes to fire and safety regulations, building permits can add significant costs to your overall budget. Since construction is a complex and agile process, you may need multiple permits and inspections at various stages throughout the project.
  • House Size and Style. There are two primary varieties of newly-built homes—production style and custom. Production-style homes are typically built according to standard designs and templates by home builders—giving neighbourhoods and individual homes a more cookie-cutter look. Custom homes are architect-designed and tailored to meet your specific needs. Custom homes are much more expensive, and the time required for planning, design, and construction is often longer than a standard production home.
  • Utilities. If you’re building a new home in a rural area or suburban development, chances are there will be additional costs associated with utility hookups. From natural gas, electricity, sewage, and septic systems to the boiler, furnace, and air conditioning, ensure you consider the costs of integrating your new home into the local utility infrastructure.

Building a new home in Canada is worthwhile if you value being able to choose your ideal location, move within proximity of your favourite activities and amenities, and want the freedom to customize your home to suit your needs, budget, and lifestyle. By planning and educating yourself on the building process, you’ll be better equipped to make informed decisions and mitigate any potential budgetary surprises. 

Interested in purchasing property for your new home on Vancouver Island?

As an experienced realtor with a strong financial background, I support clients looking for vacant land for their new home build in Victoria, Cowichan Valley, and the South Island’s Westshore communities. Contact me today to explore unique opportunities for real estate investment for new home construction on South Vancouver Island.