How Much Does It Cost to Build a House?

If you’ve wondered how much it costs to build a house in Canada, you’re not alone. While housing supply has improved across many Canadian real estate markets, inventory is still far below the historical averages in major urban centres, suburbs, and rural communities.

Is purchasing a resale residential property or buying bare land and building a home from scratch easier and more affordable? There are many advantages to constructing a single-family home from the ground up, including the opportunity to customize the space to fit your lifestyle. Room by room, you have the final say on the layout, features, and finishings. On top of all that, there is the thrill of watching the project come together.

How Much Does It Cost to Build a House in Canada?

Building a home comes with many benefits and headaches, if we’re being perfectly honest. Over the last few years, the main challenges have been the growing costs associated with labour, raw materials, and overall construction. From supply chain problems to labour shortages, creating a detached property is becoming increasingly expensive. The estimates vary, but the average price to construct a single-family house in Canada currently ranges from $100 to $300 per square foot. Of course, this estimate could be higher or lower depending on the type of house you build and where you live.

How Much Does It Cost to Build a House in Major Canadian Cities?

So, how much does it cost to build a house in major Canadian cities anyway? There is some data to provide prospective homeowners with rough estimates. According to the Altus Group’s 2025 Canadian Cost Guide, the price per square foot for a detached home in Canada’s major urban centres has risen in recent years, though there is a divergence between different Canadian real estate markets.

For example, the cost to build a house in B.C. is vastly different from constructing a residential property in Winnipeg, Manitoba. Likewise, the cost to build a house in Ontario differs from erecting a home in Prince Edward Island. This all depends on various factors, from land costs to input price pressures.

That said, here’s a breakdown of cost per square foot based on single-family residential units with unfinished basements:

• Vancouver, British Columbia: $200 to $320
• Calgary, Alberta: $175 to $265
• Edmonton, Alberta: $170 to $265
• Winnipeg, Manitoba: $165 to $250
• Toronto, Ontario: $200 to $275
• Ottawa, Ontario: $140 to $220
• Montreal, Quebec: $145 to $205
• Halifax, Nova Scotia: $140 to $215
• John’s, New Brunswick: $150 to $210

“Over the past two years, construction costs have stabilized following a period of sharp inflation, offering developers some much-needed relief,” the Altus Group report stated.

“However, while some savings have been realized, the 2025 cost landscape remains largely uncertain, shaped by both domestic economic forces, with varying impacts on construction costs across the country, and global market shifts.”

The coming year or two should be approached with caution, as the 2025 guide does not account for the potential impacts of tariffs on construction costs. Considering the state of trade between the United States and Canada, it is safe to assume that builders’ cost to build a house will be much higher.

“Similarly, they also do not factor in the cost impact of upcoming building code revisions or labour agreement negotiations,” the report added. “These factors should be considered when estimating project expenses in 2025.

This is a significant development, one that could exacerbate current housing market conditions.

According to a new study by the Canadian Home Builders Association (CHBA), the Canadian housing industry is building fewer homes to accommodate population growth than ever before.

Kevin Lee, the head of the CHBA, blamed municipalities’ development charges and approval timelines.

“Development charges, delays, and inefficient processes at the municipal level directly impact the price of homes and how many are built,” Lee said in a statement. “The purpose of this study is to facilitate dialogue with all levels of government, but particularly with municipal governments, on the effects of longer timelines, higher fees, and the level of efficiency of processes on housing affordability and outcomes.”

Of course, this could change in the coming years under a new federal government that aims to prioritize housing development and affordability by embracing a post-World War II concept.

Looking ahead, the Canada Mortgage and Housing Corporation (CMHC) said in a recent study that housing construction volumes will likely slow down over the next two years. The good news, however, is that total housing starts will remain above their ten-year average.

Study authors noted that economic uncertainty, particularly from tariffs, could alter the outlook.

“The slowdown is primarily due to fewer condominium apartments being built,” the report stated. “With low investor interest and more young families looking for family-friendly homes, developers will find it harder to sell enough units to fund new projects. The increase in unsold units will likely reduce new project launches, leading to a decline in new condominium apartment construction.”

Since November, Canadian housing starts have sharply slowed, according to CMHC data.

In March, housing starts tumbled 3.3 percent, and housing starts in urban centres declined 12.5 percent on an annualized basis.

Can I Get a Loan to Build a House?

There are Home Construction and Self-Build Mortgages available when building a house. However, your first consideration is buying a piece of land. Vacant land is an unsecured asset, so your loan typically comes with higher interest rates than a traditional mortgage. Additionally, you’re generally expected to have a larger down payment, ranging between 25% and 30% of the purchase price of the land.

These vary in interest rates and terms from lender to lender.

There are two types of construction mortgages:

• Completion mortgage: In this case, the mortgage loan isn’t transferred until construction is complete.
• Draw or a progress-draw mortgage: In this type of mortgage loan, the builder draws money in increments as the home is built.

These loans are more complicated than a typical mortgage. Speak to a mortgage broker or your bank to discuss your options to make the right financial decision based on your needs.

How Long Does It Take to Build a House?

When labour shortages and supply chain snafus are removed from the equation, it takes 10 to 16 months to build a house, assuming everything goes as planned. That doesn’t include clearing the land or tearing down an existing home. It also does not consider the many issues that can arise, from bad weather and delays in material deliveries to the extra time that can add up from delayed decision-making.

How to Reduce the Cost of Building a House?

While many things are out of your control in the average house build, there are various ways you can save on overall costs and ensure that the builders’ cost to build a house is lower.

Here are some pro tips on how to save money on your build:

Land and Location

The cost to build a house in Ontario is high, but constructing a home within Canada’s most populous province will vary. Suffice it to say, it will be much more expensive to construct a two-storey home in the heart of downtown Toronto than in Sudbury.

Location is an essential consideration in the home-building process. Generally, the further away your land is from a major city, the lower your price tag. But be careful – what you save on price could be eaten up by the cost of connecting to sewage systems, water, gas, hydro lines, and telecom towers that are miles away. If there are no nearby connection hubs, you may be forced to install your own services or consider alternatives such as a solar and battery storage solution for power, a bore well for water, and a septic system for waste containment.

You’ll also need to consider the slope of the land, the number of trees you might have to clear and any exposure you might have to environmental hazards like floods, fires, earthquakes, tornadoes, hurricanes, hail and snow. While grading and tree clearance are added costs you could save by choosing more suitable land, the cost of insuring a house built with substantial environmental liabilities could be a deal breaker – if you can get insurance for your home at all.

Get Final Quotes for Comparison

Ensure you get project quotes from several contractors. Keep in mind that the cheapest builder is not always the best. There’s often a reason that a contractor is coming in low, possibly because they constantly miss deadlines or cut corners on quality. Do your research and only accept quotes from contractors with experience building the type of home you want in your chosen location. Regional expertise and outstanding references, reviews and ratings are also a must.

When you receive your “all-inclusive” quote (versus a non-binding bid or estimate), make sure you understand what’s included and what’s not.

For example, it does include:

• The application for permits and other required municipal or government paperwork
• Labour AND materials
• GST/HST on labour and materials
• Engineer drawings
• Scaffolding
• Demolition of current structures on the land
• Waste and recycled materials removal during and at the conclusion of the build
• Disconnection and connection services for utilities and services
• A topographical survey

Site works including compaction of disturbed or unstable soil; rock removal; extra reinforcements required for building over a sewer or stormwater pipes; creation of drain fields or retaining walls; removal of trees; etc.

• HVAC systems and water heaters
• Painted interiors and exteriors
• Installation of interior and exterior light fixtures
• Cabinetry, closets and doors (including door locks and handles) for every room
• Window dressing and flooring
• Fireplaces
• Decks, fencing, driveways and landscaping
• Pool construction, including filtration and drainage equipment installation

Making the wrong assumption about any or all of the above could blow your carefully crafted construction budget out of the water and leave you on the hook for tens of thousands of dollars, so have a lawyer familiar with new home construction go over your preferred quote with a fine-tooth comb before you sign it.

And even if your general contractor includes the pool, fireplace, driveway or landscaping in their quote, you might want to compare it with a separate quote from a contractor who’s an expert in a particular trade, as you might get better work and a better deal from a specialist.

Choose Existing Home Designs

Choosing a pre-existing design over a completely custom design is far more affordable when it comes to new builds. Consider going with pre-designed choices from a library of plans that an experienced home builder might offer.

Define Your Budget

Set a realistic budget by considering what you need in your home and what you can afford. Give yourself some wiggle room to avoid strain on your financial situation. Once you get estimates, you can see if there’s a possibility of an upgrade in square footage, the number of bathrooms, etc., that you can secure within the final quote.

Consider Lifestyle

Your lifestyle will play an important role in what you need from a home. Are you planning on having a family? Do you often have out-of-town guests? Do you work from home? Do you exercise at home? Do you love cooking? How many cars do you have? How much storage space do you need to accommodate your hobbies? These questions will help you determine where you need to invest extra money and where you can save.

Save on Aesthetics

Your home style will impact both its cost now and its resale value later. If you’re not married to a particular style, consider going with a mid-century modern, farm style or craftsman style, as all allow you to get away with lower costs on the interior finishes without sacrificing the look of your home for resale purposes. For example, though you’ll sacrifice some aesthetic value, drywall will look good in all the above styles and is far more affordable than walls made with exposed brick or wood panelling.

Lend a Hand

Significant savings on labour costs can be found by doing some of the work yourself. Some of the easiest things to take on are painting and installing light fixtures. Handier people will often install their flooring or kitchen cabinets once all the plumbing and drywall are complete.

Reclaim and Recycle

Reclaimed and recycled timber, steel and brick are eco-friendly, add character and can save you a lot of money. There are also many salvage yards, shops and charitable organizations like Habitat for Humanity Restore, where you can hunt for everything from doors and windows to kitchen cabinets and sinks.

Are There Other Options to Custom-Built Homes?

Subdivision New Builds

If you’re looking for a new home but don’t have the time, energy, or money to invest in a new home build, there’s always the new-build route in a subdivision. You get a new house without having to organize contractors and tradespeople, and there is typically an option that allows you to upgrade everything from floors, countertops, tile and cabinetry to lighting and appliances, plus kitchen and bathroom fixtures.

Small or Tiny Houses

How much does it cost to build a small house? How much does it cost to build a tiny house? It all depends on who’s creating the definitions. According to a 2017 report by Statista Research Department, the average size of a Canadian home is 1,792 square feet. A small home is typically under 1,000 square feet, while a tiny home measures around 400 square feet or less and can be purchased or built for less than $200,000.

How Much Does It Cost to Build a House?

Although building a home can prove affordable, in Canada, as in other countries, it also comes with its fair share of challenges. Be sure to plan and educate yourself on the building process. The cost to build a house in B.C. does not have to be out of reach for families as long as you equip yourself with the knowledge of buying or building a home.

Then, don’t forget to reach out to an experienced REMAX real estate agent who can help you find the best raw or vacant land to build on.