Cost of Building a House: Factors to Consider

Looking to build a house in British Columbia? You’re not alone. However, with rising land prices and increasing construction costs, it may seem like an impossible task to achieve. Many people opt to purchase a home instead of building one due to these factors.

But what if there was a way to have the best of both worlds? To get the convenience and affordability of buying a home, while still being able to customize and build your dream home? This article will provide you with the information you need to know about the cost of building a house in BC and how to get the best deal without unnecessary strain.

Costs of a New House Build in BC

The cost of building a new home in British Columbia varies depending on several factors, including the location, contractor fees, cost of materials, and the preferred design of the homeowner. The estimated cost per square foot for a 2100 square foot home, excluding lot costs, permits, and connection fees, is presented in the table below for various municipalities.

It is important to note that the actual cost of a new home build in BC may vary depending on the quality of the build, materials used, and the location of the lot. Additionally, macro factors such as supply chain inefficiencies, rising wages, and inflation can significantly affect the total cost of a new home build in BC.

To get a more accurate estimate of the cost of building a new home in BC, it is recommended to consult with a professional contractor who can provide a detailed breakdown of the costs involved.

Contractor Fees

When it comes to building your dream home, contractor fees are an important aspect to consider. These fees are the amounts paid to the contractor in charge of the construction project and typically range between 10-20 percent of the total construction cost.

The contractor fee covers a variety of tasks, including managing and organizing the project, hiring tradespeople, scheduling and supervising subcontractors, ordering materials, and dealing with changes and issues that may arise during construction. It also includes other necessary administrative tasks.

While contractor fees may seem expensive, they are a worthwhile investment. Hiring a capable professional will provide you with peace of mind knowing that your project is in good hands.

It is crucial to find a contractor or firm that you can trust with a large sum of money. Look for contractors with references and testimonials from previous clients. If possible, ask some of their clients about their experiences working with them directly.

It’s also helpful if the contractor has a firm grasp on the kinds of materials and finishes that would work best within your budget. This will prove crucial in guiding decisions like choosing between two different flooring options or deciding whether to install energy-intensive AC versus focusing on insulation and a less energy-intensive AC.

In summary, contractor fees are an important part of the overall cost of building your dream home. It is crucial to find a trustworthy and capable contractor who can guide you through the construction process and provide you with peace of mind.

Cost of Land/ Construction Lot

Value Proposition of Serviced vs Raw Land

When it comes to purchasing land for construction, the cost is one of the most important factors to consider. In British Columbia, land costs are some of the highest in Canada, with an average range of $700,000 to $1,200,000 for a lot in the Fraser Valley as of January 2023. However, the cost of land is primarily influenced by its location and size. Rural land tends to be less expensive than urban land, although other factors like availability and proximity to utilities and public amenities also play a role.

In addition, the cost of fully serviced land is generally higher than that of raw or untouched land. Serviced land includes all necessary utilities and amenities, such as electricity, water supply, and sewer connection. The cost of these utilities must be factored into the project’s budget before starting the new home build, and the installation costs will depend on the demand needs of the property.

When it comes to water, the cost will also depend on the desired location. In rural areas, it may be necessary to drill a well or source water from other alternatives, which can be costly initially but affordable in the long run. It’s also important to factor in additional costs for permits, which can quickly add up to thousands of dollars.

While many people assume that smaller parcels of land cost less than larger ones, this isn’t always the case. Working with an established home builder may save new homeowners money, as they benefit from economies of scale when purchasing land in bulk and developing necessary utilities on each lot.

At first glance, serviced land may seem unreasonably priced compared to raw land, but the cost savings and convenience are just too good to pass up. Unless you plan to live off the grid entirely, certain utilities must be available on-site before starting construction. With serviced land, all necessary utilities and amenities are already in place, saving you time, money, and hassle.

Current Costs of Materials/ Upgrades for a House Build in BC

The cost of construction materials and finishes varies greatly depending on the size of the house and the type of materials used. The average cost to build a home in BC, excluding lot costs, utility connection fees, permits, etc, ranges from $275 to $450 per square foot. Therefore, a home build of 2100 ft² would cost between $577,500 and $945,000.

Finishes, such as flooring, fixtures, cabinetry, countertops, paint, window coverings, and tile work, can significantly increase the cost of building a house in BC. The type and preferred quality of finishes are among the costliest aspects of building a house.

To reduce costs, you may consider alternatives to custom millwork, such as laminate flooring, prefabricated cabinets, recycled glass, and vinyl window coverings. By choosing these options, you can still add character, style, and appeal to your house while keeping the costs down.

The table below provides a summary of the current costs of various materials and upgrades for a house build in BC.

Costs and Hassles of Acquiring Required Permits to Build a House in BC

Before beginning any construction project, it’s essential to obtain the necessary permits to ensure the project complies with the regulations and standards set by the local government. In British Columbia, the cost of permits for building a new home varies depending on the municipality. On average, you can expect to pay between $4,000 and $6,000 for the required permits.

The fees for permits are a source of revenue for the authorities and are intended to ensure the safety of the general public. The cost of permits depends on several factors, including the size and type of the house, the materials used, and the construction methods employed.

Different municipalities may require different permits and fees to construct a home legally. Additional permits may also be necessary from regional districts and other local governing bodies. It’s important to note that most of these permits are non-negotiable, and non-compliance could result in friction with the authorities.

Delegating the task of acquiring permits to an experienced contractor is highly recommended. An experienced contractor can ensure that the project has all the necessary permits and that they’re processed early enough to avoid delays. Moreover, hiring an experienced contractor can help you avoid the hassle of navigating the complex process of acquiring permits, which can be overwhelming for a potential homeowner.

In conclusion, acquiring the necessary permits to build a house in BC can be a costly and time-consuming process. However, it’s a crucial step in ensuring the safety of the general public and complying with the regulations set by the local government. Delegating this task to an experienced contractor can help you avoid the hassle and ensure that your project is completed on time and within budget.

Services & Utility Connection Costs

When building a new home in British Columbia, it is important to consider the costs of connecting your home to the grid. These costs can vary depending on your location and your primary utility provider, including power, gas, municipal sewer/water, or even well & septic. Additionally, the cost of internet connection must also be taken into account.

The following table outlines the average rates for connecting to the grid in BC:

It is important to note that the costs listed above are only averages and may vary depending on the supplier. Additionally, you may incur additional costs depending on the installation of the nearest pole or network.

When working with reputable developers, they will have already taken care of this leg work for you. However, it is still important to be aware of the potential costs associated with connecting your home to the grid.

Government Kickbacks and Incentives for Building a House in BC

Building a new home in British Columbia can be an affordable and rewarding experience thanks to the various government kickbacks and incentives available. Here’s a quick overview of the current government programs available to new home builders in BC.

1. First-Time Home Buyer’ Program

The First-Time Home Buyer Incentive (FTHBI) is a program designed to help first-time home buyers afford their first home. Under this initiative, first-time home buyers can enjoy partial or full tax exemption on their new home purchase. This program was introduced in 2019 to help ease the burden on first-time home buyers struggling to afford their first home in Canada. It is available in British Columbia and all other provinces and territories across the country.

2. Home Buyers’ Amount

The Home Buyers’ Amount (HBA) initiative was created by the Government of British Columbia to provide first-time homebuyers with financial support when purchasing or building a new home. Eligible individuals are entitled to receive a non-refundable tax credit capped at $5,000 for homes in designated areas of the province. To qualify for this incentive, applicants must meet specific criteria touching on residence, employment, and total income. The HBA is intended to help first-time home buyers cover a portion of the purchase price and closing costs associated with purchasing their first home. Furthermore, the program helps make it more affordable for new home buyers to enter the housing market and get on the property ladder.

3. Better Homes New Construction Program

The Better Homes New Construction Program is a British Columbia government initiative that provides incentives for new home builds in specific areas of the province. It was launched in 2017 and provides homeowners with up to $15,000 towards the cost of building a new home in an eligible area. Eligible homes are those that are either single-family, laneway, duplex, triplex, or townhomes. They must also be within BC Hydro service territory, and the construction has to be approved before construction. The amount provided by the program can go towards different costs associated with building a new home, including land acquisition costs, builder’s fees, materials, construction financing, and more.

4. BC Step Code Program

The BC Step Code Program is a voluntary provincial program that offers incentives to encourage builders to construct more energy-efficient homes. Established in 2008, the program’s goal was to improve new homes’ energy efficiency over time and reduce the emissions associated with new construction. BC Step Code is divided into five progressive steps, each representing an increase in energy efficiency over the previous one. Builders who choose to build to a step higher than the base code are eligible for grants and rebates from the government, as well as recognition and marketability of their energy-efficient homes. The program is designed to give builders the flexibility to choose how they build while providing incentives for those who choose to build more energy-efficient homes. It is part of the province’s long-term strategy for transitioning to net-zero energy-ready homes by 2032.

In conclusion, the government of British Columbia offers several kickbacks and incentives to encourage new home builds in the province. These programs are designed to make it more affordable for first-time home buyers to enter the housing market and encourage builders to construct more energy-efficient homes. To learn more about these programs and their eligibility requirements, contact your local government office or visit the BC government website.

Final Thoughts

When it comes to building or buying a home, it is important to make informed decisions to avoid unnecessary costs and hassles. While a new home build may be preferable, budget constraints can make it challenging. Working with an established home builder like Cressman Homes can help you save on costs while still achieving your dream home. By taking advantage of their free consultation, you can get expert advice and guidance on the best options for your budget and needs. Don’t let the costs of a new home build or purchase overwhelm you; contact Cressman Homes today to get started on your home ownership journey.

Frequently Asked Questions

What are the average construction costs per square foot for residential homes in 2023?

The average construction cost per square foot for residential homes in 2023 varies depending on the location and the type of construction. However, on average, it can range from $150 to $300 per square foot.

How do regional differences affect the cost of building a house, such as in Ohio, Tennessee, or Georgia?

Regional differences can have a significant impact on the cost of building a house. Factors such as labor costs, material availability, and building codes can vary from state to state, and even from city to city. For example, building a house in a rural area may be less expensive than building in a city due to lower labor costs and land prices.

What is the estimated total cost to build a 4-bedroom house?

The estimated total cost to build a 4-bedroom house can vary depending on the location, materials used, and the size of the house. On average, the cost can range from $250,000 to $500,000.

For custom-built homes, how does the price vary between smaller homes (around 900 sq ft) and larger homes (up to 4,000 sq ft)?

The price for custom-built homes can vary greatly between smaller homes (around 900 sq ft) and larger homes (up to 4,000 sq ft). Smaller homes can cost around $100,000 to $200,000, while larger homes can cost upwards of $500,000 or more.

What additional expenses should be considered when building on land you already own?

When building on land you already own, there are additional expenses that should be considered, such as site preparation, utility connections, and landscaping. These costs can add up quickly and should be factored into your budget.

Is building a house generally more or less expensive than purchasing an existing home?

Building a house can be more or less expensive than purchasing an existing home, depending on various factors such as location, size, and materials used. In some cases, building a house can be more expensive due to the cost of land, permits, and construction. However, in other cases, building a house can be less expensive, especially if you are able to do some of the work yourself or find affordable materials.