How Much Per Square Foot to Build a House in Ontario?

The average selling price for homes sold in the Ontario real estate market in July was $837,685. With mortgage rates where they are and the applicable taxes, fees, and regulatory costs, prospective homebuyers will endure a hefty final price tag. But when you break it down, how much are you spending per square foot to build a house in Canada’s most populous province?

Estimates suggest that a detached home in Ontario can cost between $130 and $400 per square foot. The cost may be higher or lower depending on where the house is being built, such as Sault Ste. Marie or Toronto. Moreover, costs will be weighed by which builder is hired – the labour shortage occurring in this sector of the economy has amplified the costs – and what materials are incorporated into the structure.

One more thing: Square-foot cost is typically lower for pre-designed homes than for custom-built ones.

Meanwhile, there is also variation in the cost of square feet within Ontario. Indeed, costs are lower in smaller towns and cities but higher in the major urban centres. For example, building a house in the Greater Toronto Area (GTA) can cost you anywhere between $500 and $1,100 per square foot. If you want to build in Ottawa, the cost could be as high as $440 per square foot. Of course, the cost will be lower if you choose a rural area.

According to 2023 estimates, the cost-per-square-foot of a home, particularly a single-family home with an unfinished basement, in Toronto can set you back a great deal. The same situation can be applied to a city like Vancouver. That said, if you choose a city like Halifax or Saskatoon, you could pay a much smaller price for a longer property size.

Now, building a small townhome could cost around $280 to $320 per square foot. A cottage or log home could cost around $300 to $380 per square foot. Laneway homes typically range between $370 and $420 per square foot.

Put simply, you will notice the vast divergence based on locations and home types.

The area of a single-family detached house in Ontario is around 1500 square feet on average. Condos in Toronto have an average size of around 840 square feet. If you are building a home in a rural area, sizes are much bigger, but labour and materials are less expensive.

As a result, a smaller house in a big city could cost more than a bigger house in a small town.

The same is true for labour and material costs. Bigger cities have higher labour costs, and materials cost more. However, labour and materials will likely be cheaper if you are located in a rural community or small town.

In addition, there is also variation in square foot cost within the category of custom-built homes. On the lower side, the cost could average around $350 per square foot, but if you have a higher-end home, the cost could quickly go up $950 per square foot. The more complex the design, the higher the cost will be.

For example, a one-story home will be much cheaper than a two-story alternative. If you have additional design requirements, material costs will be higher. Labour costs for a simple design are lower, so the entire house will cost much less per square foot.

The Lowdown on Soft and Finished Costs

It is vital to remember that the finishing phase can also impact your cost per square foot, in addition to the primary costs of material, labour, and design. Flooring, tiles, countertops, cabinetry, lighting, and a wide array of other features can increase costs.

For instance, if you want to add custom cabinetry or have custom closets, desks, or shelving built, this will add to the overall cost per square foot. Many people building high-end homes pay much more because they want to add specialty rooms or spaces, such as an indoor sauna, a wine cellar, or a movie theatre.

Homeowners should always understand and account for soft costs other than direct construction costs. These are expenses outside of the construction process. They could consist of various things:

• Permits
• Legal fees
• Architectural design and drawing fees
• Engineering fees
• Other professional services

According to industry experts, calculating an extra $20 to $50 per square foot for these expenses in your budget would be advisable.

In the end, working with a professional and reputable house builder can help you understand your new home’s costs and budget appropriately. Check different locations and compare overall costs. If you are set on building in a big city, learn how to save costs and the strategies you can adopt to stay within your budget. Remember, it would be a prudent decision to work with an experienced team, as that can go a long way in helping you make more informed decisions.