There is a misconception that building a house is a cheaper alternative to buying an existing house. Taking control and going the extra mile to include the details you want in your future home is possible with house construction. However, it comes with additional costs. Building a house in Toronto is no exception, what with it being the largest city in Canada. It is important that you know the cost per square foot to build a house in Toronto, among other factors, before moving forward with your project.
With Toronto having high home prices, plenty of people opt to tear down and build their own houses. They believe it to be better than paying lots of money for a home that fails to meet their wants and needs. This raises an important question: how much does it actually cost to build a house in Toronto?
When constructing a new home, one of the first steps is finding the right location to build it. For this, you can collaborate with a real estate agent to find land to buy. Alternatively, you could go online and seek out any unoccupied land listings.
When building a house in Toronto, you need to find land to build on, which basically means that you have to purchase a house for its land value. In Toronto, the average detached home is around $1,294,936. The ideal homes you should look for are those that fall below $700,000. With that said, depending on the location you desire most, you will likely have to increase your budget.
Cost per square foot
In Toronto, the prices that come with building a house primarily go by a price per square foot cost system. The cost per square foot to build a house in Toronto begins at roughly $150 per square foot and advances to $250 per square foot.
For example, let’s say that you are planning to build a 1500 square foot home. With this size, the price will be within the $225,000-$375,000 range. It ultimately depends on the per square foot cost bracket you choose. In the case of luxury houses, the cost per square foot to build them will be closer to $350-$400. It is important to remember that the outcome reflects what it is you initially pay for. Expensive, state-of-the-art materials will inevitably boost the price per square foot.
Regardless of whatever the cost per square foot ends up being, certain factors going into the calculation are:
- Building permits
- Costs for construction
- Fees for the architect and designer
Hard & Soft costs
Construction costs to build a home in Toronto are split into two categories of costs: “hard” and “soft.” Hard costs are typically things with a fixed rate. Oftentimes, they refer to the trade contract that was already enacted based on the design. The hard cost of building a house – from the initial site work to the end result – includes the following:
- Land development
- Foundation and framing
- Landscaping, including the deck and the driveway
- Exterior finish, such as roofing and siding
- Interior rough-ins, including electrical and plumbing
- Interior finish, like cabinets, drywall, and flooring
Soft costs pertain to additional activities. In other words, tasks that don’t directly contribute to the house’s construction. These costs are essential but have no affiliation with materials or labour. Examples of the soft costs include:
- Inspection fees
- Permit and site survey fees
- Legal and agent fees
- Insurance costs
- Consultation fees for engineering and architecture
- Management fees
If you want to learn more about construction costs, check out our article Breaking Down the Cost of Construction Per Square Foot.
Build a house in Toronto or buy a house?
Generally speaking, the purchase price to build a house in Toronto is roughly $699,000. The purchase price to buy a house (specifically on the east end) would be around $1,189,246. The down payment on a bought house would be close to $237,850. However, the cost to close on land for a built house is approximately $162,210.
The overall cost to build a house in Toronto might be twice as much in upfront costs in comparison to purchasing a house. However, the monthly mortgage will be half as much as buying a house that’s ready for people to move into.
Building a house is a complex process, so knowing the costs going in will save you a lot of confusion and surprises. If you want a quote for your kitchen renovation, contact our Toronto construction location. Moreover, if you want to learn about renovation and commercial construction costs, read Cost of Renovation vs. New Construction Commercial.