While the world is still reeling from the effects of the pandemic, in Canada, property investors and property owners have seen a steady rise in real estate sales. However, the rising cost of property and low inventory has made many Canadians consider building a house instead of buying one. The million-dollar question for most people is, how much does it cost to build a new home in Vancouver?
Buying A Building Lot In Vancouver
Before you build a home you have to buy the land. In Vancouver, a building lot may be difficult to find; additionally, the price of building lots has soared over the past few years.
As with all real estate, the location has a major impact on the cost. There’s a huge difference in price between lots in a commercial or residential area.
- For example, if you are thinking about building a house in downtown Vancouver, a 1056 square foot lot in the commercial area of East Hastings costs a hefty $4,250,000.
- In Kitsilano, a 3960 square foot lot in a residential area comes in at the slightly more affordable price of $3,999,000.
While these two properties are just an example, the high price of housing has led many residents in Vancouver to build a home instead of buying. However, there are many factors to consider when buying a building lot such as location, access, zoning laws and connecting to services – all of which must be considered and factored into your home build budget.
The Cost Of Building A Home In Vancouver
It is difficult to give an accurate estimate on the final cost of building a house because there are so many variables involved. The total cost depends on the design, square footage, materials used, contractors hired, building permits, landscaping needs and even the cost of lumber.
According to Canadian Real Estate Magazine, a 3,000 square foot single-detached home in British Columbia can cost between $525,000 to $975,000 to build. In Vancouver, the cost per square foot is around $260.
Securing A Loan To Build A Home
Securing a mortgage for a house is easier than getting a loan to build a home simply because the equity is already in place. Home Construction and Self-Build Mortgages are available, but if you also have to buy the land, you will need to secure a separate loan for the land purchase.
Loans to buy land and for loans for home construction usually have higher interest rates because there is a higher risk involved, but when you factor in the high cost of real estate in Vancouver, the associated costs of buying a home, and potential renovations, building a home in Vancouver may be the most cost-effective choice.
In addition to higher interest rates on home build loans, you will also need a larger deposit. Typically, lenders ask for a deposit that can range between 25 and 30 percent.
Finding The Right Contractor To Build Your Home
If you do decide to build a home in Vancouver, take the time to shop around and do a little research on the construction companies available.
- Make sure you take a look at previous projects and reviews from previous customers.
- Think about how responsive they are in their communication with you.
- Don’t be afraid to ask several companies for bids.
While it may be tempting to choose the lowest bid, it’s not always the best path. If a contractor bids low, they may try to make up the difference in time, quality or materials. What saves you money in the short term could cost a lot more in the long term.
If you want to discuss building a house in Vancouver, contact us. Our team is dedicated to offering exemplary customer service and we’d be happy to answer your questions.