An average 2,600 square foot new home sells for $1.75 million and includes $191,000 in municipal fees and taxes and $666,000 for land
The Altus Group Annual Report Canadian Cost Guide 2022tracking hard construction costs across Canada, has been released and it shows a sharp increase in costs in 2021 compared to 2020.
Altus cites a combination of strong demand, rising building material prices, continued labor shortages and broken supply chains to create a “perfect storm of rising costs.”
Considering the challenges the homebuilding industry has faced, some might find it surprising that prices haven’t risen even more.
According to Canadian Cost Guide 2022total residential spending in 2021 hit $126 billion, up from $114 billion a year earlier.
Costs compared in the guide are fixed construction costs, taken from 1,995 residential projects in 2021. Prices are based on cost per square foot and do not include land costs, soft costs such as marketing and construction. design, landscaping or financing, legal fees. or municipal fees, which vary widely across Canada.
The Homebuilders Association of Vancouver (HAVAN) released a report Jan. 31 that estimates local land values account for 38.1% of the average cost of a new single-family home in Metro Vancouver, which sells for 1.75 million bucks. Municipal taxes and fees average 10.9%, or $191,400, of the price of a new home.
HAVAN’s cost estimates are based on data as of December 31, 2021, building a 2,600 square foot single-family detached home over 12 months, per BC building code.
The following comparisons relate to a single-family detached home with no basement and the cost of custom building a detached home in Canada’s three largest markets.
In Metro Vancouver, the cost to build a standard single-family home without a basement in 2021 ranged from $150 per square foot to $275 per square foot. For a custom home in Metro Vancouver, the price range was $450 to $1,135 per square foot, according to Altus.
HAVAN says construction costs contribute nearly 30%, or $520,000, to the average selling price of a typical single-family home in Metro Vancouver.
In the Greater Toronto Area (GTA), the cost to build a standard single-family home without a basement in 2021 ranged from $165 per square foot to $260 per square foot. For a GTA custom home, the price range was from $480 to $1,050 per square foot.
In Montreal, the cost to build a standard single-family home without a basement in 2021 ranged from $130 per square foot to $190 per square foot. For a custom home in Montreal, the price range was $400 to $800 per square foot.
On average, the price to build a standard detached house in these three centers increased by 3.4% compared to 2020, while the cost to build a custom house increased by 11.1% in 2021 compared to the previous year.
For the complete 2022 Construction Cost Guide, which details single-family and multi-family construction costs in nine Canadian cities, contact Altus Group at www.altusgroup.com