How Much Does It Cost to Build a House?

How Much Does It Cost to Build a House?

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.

If you’re considering a custom-built home, here’s everything you need to know.

Is It Cheaper to Buy or Build a House?

When it comes to the average cost to build a home in Canada, according to Home Builder Canada, the price per square foot for a detached home in major Canadian cities is as follows:

• Vancouver: $130 – $230
• Calgary: $115 – $150
• Toronto: $110 – $210
• Montreal: $95 – $160
• Halifax: $115 – $150

How Can I Save When 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:

Take Bids

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 per square foot. 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.

Consider Lifestyle

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.

Get Quotes

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. 

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:

1. Completion mortgage: In this case, the loan isn’t transferred until construction is complete.

1. 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, 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.

Are There Other Options to Custom-Built Homes?

A home reno is always an option when it comes to getting your dream home. In most cases, you can lessen construction costs as it is not a complete home construction. 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.

Gelderman.ca Real Estate Team
RE/MAX Aldercenter Realty

www.gelderman.ca

Know someone moving ANYWHERE in the WORLD? Call us today--We know the BEST agents everywhere!!

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Office Phone: 604-743-7653

Open House Etiquette: What you should (and should not!) do

Open House Etiquette: What you should (and should not!) do

House hunting is an exciting experience. Open house-ing has become a hobby for avid real
estate watchers and nosey neighbours. To the serious buyers out there, an open house
represents a potential investment and a place to plant roots. But before you let your emotions
get the best of you, keep these open house rules in mind. Remember that until closing, you’re
a guest in someone else’s home.  Treat it with the same respect you’d expect your own home.

Tips for Open House Season

Open house doesn’t mean all-access.

If you come across rooms with closed doors, always check with 

the listing agent before entering. You’re there to tour the home 

and yes, that includes the closets, cabinets and cupboards. Before 

                                             you open, ask.

Wait your turn.

Warm weather, “hot” neighbourhoods and Open House signs are 

a recipe for market activity. If someone’s in a room, allow them the 

chance to tour and exit before you pile in. Get in, take a look around, 

                                             and get out.

Photo opp!

Always ask permission before shooting photos or video at an open 

house. This is still someone else’s home, so respect their privacy. 

If you’ve been given the green light to take photos, snap away. But 

                                             remember, these are for personal reference only.

Stay off the furniture.

You’re there to tour the home, not take five on the couch. Some 

homes have been staged with rented or even “fake” furniture, for 

appearance’s sake. ”Unless you’ve been expressly invited to sit, 

                                             don’t."

Take your critiques outside.

There will likely be things you like and dislike about the house. That 

goes without saying. What should also go without saying, is criticism. 

Remember, this is still someone’s home and you don’t want to risk 

                                             offending anyone – especially if you’re interested in making an offer. 

                                             You never know who’s listening.

Be polite.

“Please,” “thank you,” “hello,” and “good-bye” goes a long way. At the

end of it all, follow the Golden Rule – treat others (and their homes!)

the way you’d want to be treated.

Gelderman.ca Real Estate Team
RE/MAX Aldercenter Realty

Visit our Team web site HERE

Know someone moving ANYWHERE in the WORLD? 

Call us today--We know the BEST agents everywhere!!

Serving Abbotsford, Chilliwack, Mission, Langley, Surrey 

and the WORLD!

Office Phone: 604-743-7653

Mortgage Stress Test Hurting, Not Helping Homebuyers

 Mortgage Stress Test Hurting, Not Helping Homebuyers

The mortgage stress test began with the best of intentions. In October 2016, interest rates had been hovering at historic lows for the better part of a decade. Real estate prices were rising, and household debt grew and grew. Very real concerns arose about Canadians biting off more mortgage than they could chew, should interest rates increase, even a fraction of a percentage point.

The Office of the Superintendent of Financial Institutions (OSFI) implemented the mortgage stress test to borrowers with a down payment of less than 20 per cent of the purchase price. The initiative was then expanded to include all mortgages as of January 2018.

A year later, it appears that the stress test has successfully put the brakes on the unprecedented price growth occurring in some of Canada’s largest housing markets. Balance has returned with sustainable, single-digit price growth projected across the country. This begs the question – is the stress test still necessary? For first-time homebuyers who are most burdened by the mortgage stress test, the answer is “no.”

I am 100 per cent supportive of measures that help ensure Canadians are being responsible with the amount of debt they take on – but let’s be realistic. The economy has started to soften, and economists predict the Bank of Canada will hold interest rates through 2020. Any movement, they say, will be downward – not up. In light of this new reality, requiring homebuyers to qualify at a higher rate is simply unnecessary. Particularly with the housing affordability crisis in many of Canada’s largest urban centres, young first-time buyers need a break and they need it now.

Beyond the first-time buyers who have been hardest hit by the stress test, there’s a domino effect happening. The rental market is in a frenzy, since those who no longer qualify for a mortgage are forced to rent. On the flip side, those who currently own a starter home with hopes of selling and moving up the property ladder, are unable to find buyers, since 10 per cent of buyers no longer qualify for a mortgage.

Let’s look at some more facts. Canadian real estate continues to be one of the safest and most reliable financial investments – and the desire for home ownership here is strong. Recent research conducted by Leger on behalf of RE/MAX shows that there are two main reasons Canadian Millennials want to own a home: it’s a good investment (30%) and it’s a good plan for their future (41%). They’re right.

OFSI mortgage stress test is currently a major obstacle in what’s become an elusive dream.

"The Canadian government needs to incentivise homebuyers in Canada rather than penalize them – which is what the mortgage stress test is doing."

No one is suggesting that Canadians should purchase homes they cannot afford, but the stress test in its current form isn’t solving the housing affordability issues in our country.

As we look toward October’s election, it’s even more crucial to consider how government intervention will help or hinder Canada’s housing market for the remainder of 2019 and beyond. Certainly, housing is one of the most important issues facing Canada. Between the Liberals’ renewed focus on making housing more affordable for Millennials, the NDP’s recently defeated proposed measures to increase supply with 500,000 new affordable units over the next decade, and the Conservatives sympathizing with Canadians about a so-called housing crisis – it’s clear that they’re just as uncertain about the market as Canadian homebuyers are. I propose that this quandary around housing affordability needs to be addressed head on, rather than encouraging a ‘wait and see’ approach.

The Canadian government needs to incentivise homebuyers in Canada rather than penalize them. Other problems, such as affordability, are starting to manifest in negative and preventable ways.

Let’s not wait to make some crucial changes.

Gelderman.ca Real Estate Team
RE/MAX Aldercenter Realty

Visit our Team Web Site HERE

Know someone moving ANYWHERE in the WORLD? Call us today--We know the BEST agents everywhere!!

Serving Abbotsford, Chilliwack, Mission, Langley, Surrey and the WORLD!

Office Phone: 604-743-7653