Price to Build a House

Price to Build a House

The price to build a house is the number one reason that more people don’t build a custom home. It goes without saying that it will be a costly endeavour, but how much does it actually cost to build a home? If you’re curious about how the costs break down, where the costs come from, and what your total price would be, you’ll have all your answers in just a few minutes.

There are thousands of people in your exact position right now, wishing they could build a home but are too intimidated by the cost to go any further than their dreams can take them. However, it might not be as expensive as you think. Let’s investigate a little and get to the bottom of how much it’ll cost to build a new home.

Cost Per Square Footage

Unfortunately, there is no clear-cut, straightforward answer when people ask how much their home will cost to build. Until you sit down with a builder and make all of your design decisions, you won’t be able to get a very accurate estimate. However, the most common method of “guesstimating” how much a home build will cost is to calculate by square footage.

The average new home costs between $200 and $300 per square foot. This number accounts for both labour and materials as well as the land prep related to the build. High-end and luxury homes can cost upwards of $700 or $800 per square foot if not more. To put these numbers in perspective, the average square feet of a single-family home in Canada is roughly 1800 square feet. If we use the average square footage rate ($250), an 1800 sq. ft. home would cost about $450,000. Not so unreasonable, right? But if you wanted a mid-level home, say at around $500 per square foot, you’d be looking at $900,000 for your new home. You can probably guess how much a luxury home would cost, right? Not cheap by any stretch of the imagination.

But why is there such a huge range between the lower end of the scale and the higher end of the scale? It all comes down to your design decisions and the quality of the materials being used to build the home. If you choose extras such as heated floors, floor-to-ceiling glass windows, marble countertops, or a hundred other higher-end finishing’s, your cost per square foot will skyrocket.

The Builder

Your builder will also have a lot of influence over the price to build a house from scratch. Your home builder should be heavily involved in your budget development since they can help you set reasonable limits while being realistic and prepared for every eventuality. It might be tempting to choose a builder that offers a lower price for the job, but it’s all too easy to run into issues when you do. There’s a reason that a particular builder is able to offer you a significantly lower price than the other bids you’ve received, and it probably isn’t because they just like you enough to give you a break. No, a builder who offers a significant discount is probably using unqualified labour, taking shortcuts, or using less-than-optimal quality materials for the job. Any perceived discount will end up costing way more in the future, so it’s in your best interest to go with a builder who is transparent about costs and the functional outlook of your home based on certain budget restrictions.

Factors That Influence the Price to Build a House

Aside from materials and labour, the cost of which will change depending on your builder, there are three main components that will affect the price of your custom build: the build site, the architecture and finishes, and the interior design and furnishings.

  1. Build Site. The location of your build will have a big impact on the first costs you see in your custom build project. The price of the land will be determined by its size, proximity to the city and amenities, and whether or not you’re building on coveted land (beachfront, forest view, mountainside, etc.). What people don’t often consider is the land itself; its topography, soil quality, and bearing capacity will affect the price of your home since certain characteristics of your plot will make it more difficult to prepare or build on. For example, a plot of land full of stone and rocks would take a lot more time than a plot that’s already been graded and sectioned, right? So, if you choose a spot covered in trees, your overall costs will go up since your builder has to remove the trees and flatten the ground before anything else can be done. You’ll also have to consider whether your location allows you to connect to the city sewer system or if you need a septic tank installed.
  2. Architecture and Finishes. The style of the home will also affect the total price to build a house since some styles are more complicated than others. For example, let’s consider a roof. If you choose a roof style with numerous gables rather than a single gable, and opt for a more expensive and more complicated roofing type, the cost of your roof will be much higher than if you chose a simplistic roof style with basic asphalt shingles. Now apply that logic to every element of your home. Things can add up really quickly if you opt for higher-end finishes and materials on your home.
  3. Interior Design and Furnishings. It isn’t only the actual construction that needs to be considered in the cost of your home. You’ll need to account for all interior touches such as paint, lighting, furniture, appliances, and more to furnish your home and make it your own. You’ll have to include everything from window coverings to landscaping in your total budget since these minor details add up quickly.

You may also have project management fees, permit fees, insurance fees, land surveying fees, engineering fees, and inspection fees if you don’t work with a professional home builder who includes these costs in their price.

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