There are several variables to consider when estimating new home construction costs in Ontario.
Costs vary among cities, the current average cost per square foot to build a house in Ontario falls between $150 to over $300. The overall average in Canada is typically between $117 to $190 per square foot.
It's important to remember that average square footage costs do not determine the final construction price. These are just ballpark averages to help you estimate costs in advance.
If you want more specialized, customized building services, expect your cost-per-square-footage to go up. For example, specialty stone carving, eco-friendly construction, solar panels, and other specialty elements may add to the cost.
How do contractors arrive at these estimates?
Let's start with square footage:
Average Cost to Build a 1500 Sq Ft House
The average square footage of a single-family home in Ontario falls between 1,500 and 1,600 square feet, averaging at around 1,520 sq ft.
If the average cost to build a home in Ontario is $150 to $300 per square foot, a 1,500 sq ft house would cost between $225,000 to $450,000. However, you still have to consider other cost factors that may not be included in these averages.
If you want to build a 2,000 sq ft house in Ontario, expect to pay at least $300,000 to $600,000. A 3,000 sq ft house would cost approximately $450,000 to $900,000, and so forth.
Average Cost to Build a House in Toronto vs Other Major Cities in Canada
As the cost of living varies by cities across Canada, so does the cost when building a home. In the chart below we take a look at what the average cost to build a home in Toronto as the primary example, followed by all other major Canadian cities. These numbers are based on a 1500sq ft home, do not include the cost of land, finished basements and are typically single-family homes.
Building vs Buying a House - Which Is Cheaper?
While there are more cost factors to consider, building a home in Ontario can be cheaper than buying a home in many cases.
The average price of a home in Ontario is around $514,000. For that price, you could build a 1,500 to 1,600 square foot home. If you build in an area that appreciates in value, you could sell your property for even more.
Land is just one crucial cost factor. You also have to consider labour rates, building materials, and any preparation work before you build.
Here's a closer look at the top cost factors.
Buying Land in Ontario
Since you're building a house from scratch, let's start from the beginning.
Every new home construction starts with land.
If you want to build a 1,500 square-foot home, you'll need to buy enough land to accommodate a front yard and backyard. You'll also need extra land if you want to build a shed on the property.
Land prices vary by location. Costs start as low as $1,000 to over $50,000 per acre in Ontario.
Research the costs of any surrounding land to ensure the price aligns with the value. You may be able to negotiate a lower price with the landowner, especially if it's a buyer's market.
How to Pay for Land in Ontario?
Land is a large investment. Fortunately, you can find excellent construction mortgage rates, credit cards, and personal loans to help you finance your dream home.
Insurdinary lets you compare Canada's top lenders to find the right financial solutions for your project. Compare and contrast repayment terms, borrowing limits, credit eligibility, credit lines, and fixed rates.
You can also get a personal loan to cover miscellaneous costs, like home furnishings, landscaping, gardening supplies, home improvement costs, and anything not covered by your construction loan. Visit Insurdinary's personal loan network to compare APR, credit eligibility, repayment plans, and interest rates.
Calculating Labour Costs
Contractors charge by the square foot, but most provide full job estimates before moving forward. Full job quotes are preferable to hourly rates. Paying hourly could result in much higher total costs than expected.
Costs vary by contractor, but most factor in employee payroll, transportation, fixed hourly rates, portable toilets, and insurance into job estimates. They also rent waste receptacles for material disposal, which also factors into the overall cost.
Building Material Costs
The bulk of your home build will go to building materials, like cement foundation, roofing, lumber and insulation. You also have to install a new plumbing system and electrical wiring. You may have to install a sewage system as well.
Most building materials are priced by the square foot. Unless you're building the house yourself, your contractor will purchase these materials and add them to your total build cost.
If you have a preferred building material, like solar panels, look for green contractors experienced with solar shingle installation. You may need to hire a separate roofing company too.
Common House Building Materials
Here's a quick rundown of common home building materials:
Building material composites
Indoor and outdoor paint
If you're building a house yourself, make room for error in your budget. Most home contractors factor in material waste into job quotes. They may add an extra 10% to 15% of extra building material.
Some contractors offer new home electrical wiring, but you can hire a separate company if you want. HVAC wiring is different than general electrical wiring, so you may need to hire an HVAC contractor too.
Additional Building Site Work
Most property owners remove old structures. However, you could reclaim some of the wood for home decor. Some homes may be salvageable, as well, if you enjoy the aesthetic.
Contractors also remove old cement foundations, plumbing systems, underground tanks, and other leftover materials.
Land clearing is also necessary.
You may need to remove several trees, root systems, stumps, and boulders. Contractors will bring in more soil and level out the land, also known as earth moving. Contractors and landscapers can also create natural-looking slopes, ponds, and gardens.
Property owners need land surveys to draw legal boundary lines. Soil testing is also important, as contaminated soil must be removed immediately. You may need new soil to grow healthier gardens, grass and crops if you are building a farm.
If you're building your own home, you'll need to get a building permit from your local municipality. Your hired contractor can help with the process. You also need to comply with residential zoning laws in Ontario.
You can always to talk to a real estate lawyer who's experienced with new home construction in Ontario. They'll ensure you're in full compliance throughout the building process.
Where Can I Build a Tiny House in Ontario?
There are plenty of places in Ontario to build your dream home. In fact, Canada in general, is stunningly gorgeous.
Property owners are flocking to Shelburne Ontario for its charming appeal and vast, beautiful farmland. Affordable land may be the top reason for the town's rapid growth. The town's quaint downtown is also lined with historic Victorian homes and post-war architecture.
Collingwood has more to offer in terms of nightlife and activities, whereas Shelburne is more quiet and rural.
Collingwood is quickly making a name for itself in Ontario's tech sector. It's also a top vacation destination, which is something to think about if you want to make money with your property.
Ontario's capital is still a popular location for new homes. It costs roughly $900,000 to build a house in Toronto, while it costs $300,000 to build a home in Ottawa by comparison. However, custom-built home builds can be twice as more per square foot.
Kitchener is another affordable option for new home construction. It costs almost half as much to build a home in Kitchener than Toronto, totalling anywhere from $225,000 to $450,000 for a 1,500 square foot home.
How to Choose Your Location?
Affordability is just one factor to consider.
If you want to make a decent profit on your home, build in areas with appreciating home values. Research up-and-coming locations in Ontario, including tourist spots.
Family needs are also important. Research top schools in Ontario. Consider future job growth, top industries, colleges, and cost of living.
Will you be retiring in your new home?
Make sure you're as comfortable as possible. Windsor is a popular destination for retirees. Residents love the weather, low cost of living, and wineries!
Can You Get a Mortgage to Build a House?
Homebuyers can apply for mortgage loans, but what about new home constructions?
Construction loans can cover the total cost of your new house. However, these loans are large and may require strong credit scores for approval. If you're unable to secure a construction loan, there are still plenty of ways to get funding for your dream house.
Construction loans often require down payments. Borrowers may have to pay anywhere from 5% to 20% upfront. However, you may be able to get construction loans with no money down through government programs or private lenders.
Builder financing is also available from select contractors. You would request a quote first then discuss financing options. Contractors may partner with just one lender or a network of private lenders.
Personal loans also help with construction projects.
Insurdinary features personal loans for all credit scores, including minimal credit checks. These loans are more accessible but come with higher interest rates. Even with bad credit, you could be eligible for up to $10,000.
Property owners can apply for personal loans of up to $50,000 for extra expenses. Eligible applicants also enjoy low 2% interest rates on select loans too. Credit cards are also available for building costs.
How to Save Money When Building a House?
Building a home isn't cheap, but it's not as expensive as buying a new home in some areas. You can also reduce many building costs.
Consider Your Location
First, build in areas with affordable land and low property taxes. For example, Toronto has lower property tax rates than Windsor, followed by Markham, Richmond Hill, Vaughan, and Milton.
Negotiate and Get Multiple Quotes
You could also negotiate with your contractor to lower the overall job estimate. You don't have to use all of the contractor's services, either. You may find more affordable roofing solutions, house painters, or window installation contractors. Research is key when hiring contractors. Online reviews in the contracting business speak volumes. Take the time to read them. Hiring the wrong contractor can cost you thousands down the road if the work isn't done properly. Some building materials are much more expensive than others. You can certainly find less expensive materials that last for years. Research building materials before choosing a contractor, and don't hesitate to inquire about materials. Look for contractors who offer discounts, coupons, and special offers. You can also find deals in your local paper. Some building contractors may offer complimentary inspections or other services for large projects.
Keep It Simple by Thinking Small
Keep it simple. Complex building structures require more materials, design work, roofing, and time. These homes take longer to complete, which adds to labour costs. Everyone wants their dream home to be expansive but is that really practical? Think of only the space you need as the less you need the less you will pay. As well, think down the road. A 6 bedroom home will be far more complicated to sell then a 3 bedroom home.
Consider a Pre-Designed Home
While we can envision what our perfect home will look like, custom designs are very costly as they usually require the services of an architect. Selecting a pre-designed home from a reputable builder will significantly lower those costs, and often times, being able to choose your own finishes is a fun project and will set your home apart from others in terms of looks.
Select Modest Finishes
High end materials don't need to be used in every room. Choose the ones that are important to you and bulk your spending into those rooms.
Finish Certain Projects Down the Road
Do you really need the basement finished today? Does the pool need to come with the delivery of home? Probably not. Making your home livable for the time being and reserving some projects for down the road can save you a lot of money today.
How Long Does It Take to Build a New House?
On average, it takes anywhere from six to ten months to build a house in Ontario. It could take up to a year for some housing designs. This is important to know since self-build loans last for one year.
Preparation makes a huge difference. Any bumps in the road can slow down the process.
There are many steps to building a house.
Every new build starts with a layout design. If you're not designing the house yourself, you'll need to work with an architect or contractor who can create a blueprint.
Next, the contractor will prepare the building site for construction. They need to pour the foundation, construct the framing, and install plumbing. They also build interior walls, install insulation, add drywall, and install flooring.
You also need a driveway and garage. However, you can hire separate driveway pavers too.
Home fixtures are added last. Your contractor will also lead a final walk-through of the home before construction is officially complete.
Start Building Your Dream Home in Ontario
How much does it cost to build a house in Ontario?
With the right contractor, home design, financing, building materials, and cost reduction tricks, you could save more money building a house than buying one.
Remember these tips as you start planning your dream home, and let Insurdinary help you find the loans and insurance you need to protect your dream.
Contact Insurdinary to learn more, or start browsing our wide selection of mortgage and home insurance solutions right now!