With Toronto housing prices being what they are it is natural to think that building might be a better option to buying a resale property. The truth is that custom built homes can often cost just as much, if not more, than resale homes.
What to consider
There are several factors that make building expensive. Not only has the cost of building the materials sky-rocketed, but so has the cost of land. Regardless of where you choose to build your home here are some of the costs you will have to include in your budget:
- Land
- Building plans
- Labour (General contractor, trades)
- Foundation
- Materials
- Land prep
Land
If you want to purchase land in Toronto, it will run into the hundreds of thousands of dollars – in the centre of the city it could also be over a million. If you are comfortable living outside the city, then land costs drop significantly. Where you want to build will be one of the biggest determinants of your overall budget.
Building plans
There are a couple of options when it comes to building plans – hiring an architect/firm to draw them up or purchasing the plans online. Depending on the scope of your project plans can cost between $6-$15 per square foot.
Labour
Once you have your plans, you’ll need to find someone who can help you make them a reality. Your best bet is to hire a general contractor unless you are very familiar with construction and are ready to put in the time needed to find and coordinate all the trades needed to complete your build. General contractors range in price anywhere from 10%-20% of your total building cost. Your other option is to buy a prefabricated home and have the company deliver a finished property to you – this is usually the easiest option, but will cost more than doing it yourself.
Foundation
On average, an unfinished basement foundation for an average size home costs roughly $33/square foot. It can be less if you just need a poured slab.
Materials
Materials are hard costs that include everything needed to deliver a finished, move-in ready property. While much of the material costs you cannot control, you can control the kind of finishes you want – and this will greatly influence how much your overall material bill will be.
Land prep
Unless the land you purchase has already been cleared of trees, boulders and any existing structures, you will have to budget it hiring specialists to come and prep your plot so that it is ready for the actual build.
Overall
What does all this mean? Well, it means that in Toronto the cost of building a custom home can range from $205-$280 per square foot excluding land costs. So, that would mean that an average sized 1500 square foot home would range in cost between $303K-$420 plus the cost of land.
