How Much Does it Cost To Build a House?
Building a home in Vancouver, British Columbia often comes with a lot of questions like how much is it going to cost you, where can you find land, how to keep costs low and stay on budget and why not just buy an existing home?
First, why not buy an existing home and skip the hassle? Buying an existing home comes with its own set of problems and solutions and it doesn’t mean you’ll avoid any hassle.
When you build your own home, you get exactly what you want from the size of the house and number of rooms to the color on the walls and finish on the floors. Unlike when buying an existing home you have a say in the finished product.
However, while your dream home might already be finished to perfection in your mind, you have to start from the bottom up and consider every cost associated with building a home before you can get what you want.
Table of Contents
- 1 So, How Much Will it Really Cost?
- 2 Finding and Surveying Land
- 3 Understanding Your Neighborhood
- 4 Architectures, Engineers, designers, and contractors
- 5 What are the benefits to cost consulting and project management?
- 6 What’s in a contract?
- 7 Construction Costs: Soft Vs. Hard
- 8 Finishing Touch Factors That Affect Costs
So, How Much Will it Really Cost?
The typical cost per square foot to build a house in Vancouver, BC runs between $200 and $350+ dollars per square foot. Some prices are even as high as $500 or more per square foot. The larger the house, the more expensive the build. Higher end finishes will also cost more. Home building prices in Vancouver vary wildly.
The average cost to build a house can range from as low as an average of $300,000 to $350,000 for a 1000 square foot home to double, triple or even quadruple that amount. An average sized 2500 square foot house, for example, will cost anywhere between $500,000 and $875,000 to build based on these price considerations. Higher end finishes will increase the price dramatically.
It’s important to note that the price per square footage doesn’t encompass the total cost to build the home. Factors including land prices and other services should also be included in your estimate to get a final idea.
All costs for building your home should be reflected in your contract, but your building contract may not include additional services such as project manager fees. If you are already starting to feel confused, this is where your contractor and project manager comes in.
They help you figure out all the costs before you even begin. If you haven’t researched land for building yet, they will help you with that as well.
Finding and Surveying Land
Land prices are based on many different factors including land quality, desired location, square footage or acreage, and current market conditions. Since prices can range from anywhere in the low thousands to well over a million dollars, you’ll want to factor land costs into your budget and try to stay within your range.
For this article, we will focus on average land costs. In most cases, you’ll also need to include the following expenses:
- Fees for a Land Surveyor who determines soil conditions, topography, and bearing capacity. A land full of rock and stone will be harder to carve into, but building on soft or marshy land will require more support and precautions to prevent foundation cracks from excessive moving or settling.
- Fees for Zoning Requirements include the maximum size house that’s allowed and other property restrictions. The assessor will tell you how far back from the street your steps need to be and how much front yard space is required by the city. Every area has its own set of restrictions so don’t assume that one piece of land is the same as the next.
Other considerations when finding land include whether sewer and water come via city pipes or private wells and septic systems need to be installed which affect costs associated with building on the land.
Rural land further away from civilization and city amenities are less likely to have city sewer and water and more likely to require wells and septic systems.
Land closer to the water or city will cost more than rural land, however not all rural land is buildable. If land already has running water and electricity, that is a bonus since you’ll save on some costs.
Understanding Your Neighborhood
Knowing the neighborhood you want to build in is important as well. When buying a home already built, realtors will consider prices of other homes nearby to determine the best value for your property.
This should be considered when building your home as well. If all the homes in your neighborhood appraised at an average of $450,000 you will lower the value of your own property if you build a house that appraises in a higher price range, $650,000 for example.
Land prices will vary based on location. In North Vancouver, for example, land and building prices are much higher than they are in the more rural eastern parts of Vancouver. West Vancouver also offers higher priced land, but you can typically find parcels to build on for under $300 per square foot.
Architectures, Engineers, designers, and contractors
Your estimated budget for your dream home should include the cost for architectures, engineers, designers, and other contractors. Contractors offer various services from building the home to running the entire project with project management or cost consulting services. Architectures can be included in this process or consulted with in advance of hiring a contractor or project manager.
If you aren’t familiar with the planning and follow through for building a house, like many new home builders, you will want to consider hiring a project manager. Once you know where you want to build your home and have factored in the associated costs, you’ll want to decide if you want to pay for both an architect and a designer.
While an architect designs the house using engineering, design theory, and creative invention they often provide project management services. Though they use engineering concepts in their designs, often an engineer is still needed to consult on structural and mechanical elements.
Designers, on the other hand, are helpful for interior space planning and organizational flow. Often all three are needed to create the best home layout and avoid any unexpected surprises during the building phases.
What are the benefits to cost consulting and project management?
Everyone involved in the building process from the architecture designing your house plans and contractor building your foundation to the painter putting on the finishing coat of that must have, in-style color and the landscapers who seeds your brand new lawn should be included in the project to gauge an accurate price.
Project managers specialize in managing the process from start to finish preventing surprises from popping up outside of expected contract prices.
Cost consultants are there to make sure you pay a fair price for services rendered. Since costs vary widely from one service to another, from one contractor or business provider to the next, a consultant can help you choose the right services within your budget and help you get the best value for your money by providing real time data and estimates.
What’s in a contract?
The contract includes all costs associated with building your home from material costs with contractor markups and trade labor fees to contingency amounts that allow for overages or unexpected cost.
The contingency amount, also known as the escalation allowance, is usually a percentage price and keeps you from coming out-of-pocket in the event of issues or additional unknown needs. Contracts are broken down by the following:
- Construction Costs
- Labour Costs
- Equipment Costs
- Material Costs
- Permits and Additional Fees
- Escalation Allowance
- Inspection and Survey Fees
Construction Costs: Soft Vs. Hard
Construction costs include hard costs and soft costs. Hard costs are controllable, fixed costs like time and labor, various trade’s contract prices—for example, the painter will get a fixed price of $10,000 to paint a 2500 square foot home, and materials excluding extra’s that may be required due to surprises popping up during the build.
Hard costs only change according to the price of the finishing materials used in construction. High-end materials, for example, will cost more than the lower end equivalents.
Soft costs fluctuate depending on the contract. These costs cover everything not included in the hard costs such as:
- Land related costs
- Architectural, engineering, and legal fees
- Insurance and bond coverage
- Design consulting services
- Additional Cost management or project management services
- Realty taxes, land surveys, and environmental testing
- Appraisals and inspection fees
- Construction trailer and equipment
- Energy consumption fees
Finishing Touch Factors That Affect Costs
Besides land prices, architecture and design services, labor and materials, building permits, fees, insurance coverage, and additional equipment needs, the end cost to build your new home will increase or decrease based on whether you use high-end or low-end finishes or require additional equipment like bobcats and cranes.
This lists some factors that will increase or decrease the cost of your project.
- Your desired home size, square footage, and the number of stories and rooms you want will all determine a higher or lower price when building your home. A larger home requires a larger foundation, additional building materials (more planks, more drywall, more beams, additional windows), and a longer build process which also increases labor costs and time associated with the build.
- Your home’s shape also makes a difference. Square homes are typically easier and faster to build than say a circular home that would require custom building materials and mechanical's to be installed.
- Your roof matters as well. There are different shingle materials and the slope and accessibility of your roof will cause the price to fluctuate. A gambrel, for example, has many gables and eaves, which mean more cutting and specialty pieces to lay roof on.
- Materials include everything from the beams used in your foundation and drywall that you’ll hang your pictures on to lighting and faucet fixtures. Determining price range is almost impossible until you know what type of materials you’ll use. Counter tops, for example, come in many different options and price points as do cabinets and paint colors.
- Appliances are another consideration in building prices. Your basic appliances include an oven and stove and a fridge. However, your newly built home might need more like a new washer and dryer for your awesome laundry room. Appliances range in price from a couple hundred dollars to thousands of dollars for high-end products.
- Mechanical Systems. You’re heating, air conditioning, water, septic or sewer systems all come in high-end or low-end options as well. You’ll want to consider the cost of all mechanical equipment as well. For some materials, it is worth it to spend more.
- Design features include your finishing touches such as crown molding, paint colors, bathroom vanities, counter tops and cabinet materials and colors. The number and location of your bathrooms, size, and location of closets, and if you want additional organizational features.
- Landscaping design and planning. Cost increases come from options like running an outdoor speaker system, creating ponds or garden areas, adding trees or structural features like porches, patios, and play sets, or putting in a pool.
Security systems are a hot topic and should be considered in today’s digital market. Features for home security include apps that allow you to control it from your phone, anywhere which help protect your home. These features can be installed when the home is built.
Building a home requires multiple contractors and services to come together to create the finished, livable piece. While the average price per square foot to build a home comes in at around $250 that doesn’t include all the price considerations mentioned above.
When determining the cost to build your new home, don’t forget your line items for building permit costs, structural engineering and architectural needs, and survey and inspection fees.
It’s easy to become overwhelmed when considering all the factors that come into play when building your home.
The best way to make sure you get the right result for your money and time is to start with knowledgeable experts who answer all your questions and guide you through the process.