Looking to build a house in Canada, specifically in Victoria? Our blog post breaks down the various costs associated with building a new home, including materials, labor, permits, and more.

The question comes up all the time. Just how much does it cost to build a house in Victoria? I’ve built a few house over the years, and the answer can vary widely based on a number of things. Let’s break down some of the major factors.

Factors that Affect the Cost of Building a House

All properties are not created equal, and some of the major factors affecting the cost of a build are the build lot cost, materials, labour costs, and then sundry expenses.

Land and lot preparation costs

In Victoria, this is likely to be one of the major considerations. Lot sizes can vary widely depending on the location, and the value of those lots per square foot can also change greatly. For example, a couple acres in the Highlands may be much cheaper than a half-acre lot in Uplands.

Once you’ve zeroed in on a property, then you have to consider the costs of site preparation. If you’re building in an established neighborhood, site prep costs could be fairly low, as most services (Hydro, water, etc.) are likely already in place. However, if you’re building in a new or remote location, or on a larger lot, simply leveling the build site could run you thousands of dollars before you even start to dig a hole for the foundation.

Building materials

It’s well known that we’ve been struggling with inflation over the past couple of years. Supply chain disruptions and a very heathy demand for renovations and new construction has driven up the cost of building materials substantially. Now inflation is starting to cool, so we are beginning to see some reductions in material costs, but the aggregate is still much higher than it was even a couple of years ago.

Labour costs

With unemployment number still fairly low, we’ve seen labour costs drive fairly high of late. Again, as the economy begins to cool, labour costs should begin to subside, but a red-seal carpenter in Victoria should charge out around $55/hour as an example.

Of course, trade labour costs are one thing, but another major expense will be the cost of a general contractor. Depending on the size of a project, a general contractor will charge between 10% and 15% of the build costs to complete your home.

Permit fees and other regulatory costs

On top of everything, you will have to consider build permits, BC Hydro connection fees, and other regulatory costs that go along with the build itself.

Other costs (e.g. architecture and design, landscaping)

Before you stick a shovel in the ground, you’ll need to have plans drawn up for your new home. This entails hiring an architect and/or designer to translate your dream into a workable set of plans that your contractor can use. A lower cost alternative is to buy a pre-0made design and set of plans.

Average Cost of Building a House in Victoria, Canada

According to recent market statistics, the cost of new construction in Victoria can average between $275 - $500 per square foot. Where you fall in the range will depend on the style of house your build, quality of materials and finishing, complexity of construction, etc.

So how does that compare to the rest of the country? (The following estimates are just the construction cost, not including the land).

 

Location	<1,000 sqft	2,000 sqft	3,000 sqft
Canada ($185)	$185,000	$370,000	$555,000
Victoria ($387)	$387,500	$775,000	$1,162,500
Vancouver ($400)	$400,000	$800,000	$1,200,000
Halifax ($135)	$135,000	$270,000	$405,000

Steps to Estimate the Cost of Building a House in Victoria, Canada

So where do you begin? Let’s have a look at the major steps.

Step-by-step guide to estimating the cost of building a house in Victoria, Canada

Start with your location. You first major cost will be acquiring the land, and you need to have an understanding of the type of property and the location you’re looking for as a starting point for your overall costs.

Once you have a rough idea of the property cost; you’ll want to get an idea of the size and type of home that you’d like to build. As previously mentioned, where you fall in the range of cost per square foot for construction in Victoria will largely depend on the style of house (e.g. it costs less to build a two-story modern than a sprawling rancher), and the level of finishing and materials you use.

With a plan in hand, you’ll want to meet with several contractors to get an idea of what you’re looking at for square footage costs, and how much they’re going to charge you for the build.

Tips for keeping costs under control

It’s very easy to go over budget when you’re building a house. A couple hundred here, a couple hundred there and pretty soon you’re looking at real overages. A reasonable expectation is that costs will come in 10% higher than you had planned for. However, you can mitigate these risks with the following tips.

Get multiple quotes for everything (including when hiring your general contractor). Now cost is never the only factor, but it’s a major one, and needs to be considered in every decision.

Treat your budget seriously and stay on top of it. You should be able to ask your contractor where you are on costs (over/under) at any given time. This is likely to be the most expensive thing you’ve every purchased, so you need to keep your eye on the ball.

One of my favourite quotes is “it’s not show-friends, it’s show-business”, and the same applies to building a house. You are entering into what will likely be at least a one-year relationship with your builder. And so you’ll want to work with someone you like and trust. However, make no mistake. They’re in business to make money (as they should). And you want to make sure you stay on budget. You’re entitled to ask questions and make sure you’re both  on the same page.

How to budget for unexpected expenses

Expect the unexpected when building. You might find a very large vein of granite running through your dig site, which will mean a large increase in excavation costs. Or, you might find that lumber prices have increase greatly from the time you planned your budget and the time that you break ground.  Putting a fudge factor into your budget from the get go will help to absorb some of these unexpected cost increases. And you never know, maybe you’ll come in under budget.

Conclusion

Building your dream home is something many Canadians want to do. Construction can be a daunting prospect, but the reward will be a home that’s tailor made for you. 

 

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Michael Watkins is an Investment Advisor with CIBC Wood Gundy in Victoria B.C. The views of Michael Watkins do not necessarily reflect those of CIBC World Markets Inc.