How much does it cost to build a house: Toronto

The housing market in Toronto has been facing seriously tight supply issues for a few years now and there are more buyers eager for a house in Toronto than there are homes for them to buy. Perhaps you are in this situation and want another way. Or maybe, you just aren't impressed with the homes on the market and want to design your own dream house.

What is the average cost of a new build?

- Land Costs

Assuming you are buying an existing home in Toronto for its land, you will probably look for a detached home. The average price of a detached home in Toronto and the GTA is over $1.5 million dollars, but there may be options for as low as around $700,000 if you are lucky. Demolition of an existing house can cost you $10,000 to $50,000.

- Hard costs (average per square foot construction costs)

Hard construction costs refer to the actual labour and material costs that go into the house. Hard costs for the GTA can cost $250-$400 per square foot or more for a production home. A custom-built home can cost up to $600 or more per square foot. How much you pay per square foot will vary a lot by project, and costs in the construction industry change all the time, so these are only estimates. These costs are 'hard' because they are fixed costs based on the quoted materials and labour needed.

- Soft costs

Soft costs are the costs of anything else in home construction such as legal fees, permits, surveys, engineering, zoning review, house plans, insurance and more. Soft costs can vary a lot but will likely cost you at least $30,000. These costs are 'soft' because they can change and vary during the build process.

- Additional fees

There are many other fees you will likely pay beyond hard and soft costs. Some of these are administrative, such as land transfer taxes, but will also include materials costs such as landscaping, appliances, and furnishing.

Total cost and financing options

In total, you should expect to pay at least $1,000,000 to build a 3,000 square foot home in Toronto, though a custom project can cost significantly more. This is in addition to costs in acquiring the property.

If you need to finance a build, there are special mortgage options available, but they are a bit more complicated than your standard mortgage. Construction mortgages usually pay out in stages during the construction process. You should talk to a mortgage broker for more specific details.

Conclusion

Building a home can be a challenging but rewarding experience. In terms of the total cost, you may pay more upfront than a traditional home, but the satisfaction of a new home and future appreciation of value will make up for these costs. If you want to try to save money, just be careful. There are a ton of small but important steps along the way and everything must be done properly. We recommend working with a reputable builder who can help you understand all the costs involved and get your construction project done on time and on budget.