An Update on Home Construction Costs

Published on May 4, 2023

When folks go house hunting, many already have a vision in mind of what their new home should look like—the kitchen size, the bathroom finishes, the open-concept main floor, and more. Picturing your family interacting with the space, the gatherings you could hold, and where you would relax are part of the fun of buying a home.The odds of finding an already-built home that matches your exact vision are low. When looking, it is important to keep an open mind and think about long-term investment instead of short-term trends. Often people will become frustrated with the options on the market and look at building their own home to ensure they get exactly what they want. However, it is no secret that builders and homeowners have faced obstacles over the last few years when deciding to build their dream property.  

The piece of mind

The main draw for most home builders is being able to customize the home completely. Being involved from start to finish, choosing the layout, the number of bedrooms and bathrooms, the style of flooring, and the colours are just a few of the main reasons. You want a home that fits your family’s needs.There is confidence in a brand-new home. You won’t need costly renovations, potentially uncovering a missed issue that can turn the home into a money pit. You’ll know the house is up to code, that nothing is going to cave in or collapse on you, no weird leaks or mold hiding anywhere. It’s hard to put a price on that piece of mind. 

The costs involved

Building a home from the ground up is a daunting endeavor. There’s a lot more to consider besides the aesthetic choices. You must find the ideal lot to build on, find the perfect design, and determine what you can afford.Home construction costs have risen due to the cost of materials, especially lumber, having gone up in recent years, making construction costs per square foot a lot more expensive than they had been. Trades in themselves have also increased and therefore trickles down into the overall cost of your project. Supply chain issues also made it difficult to get building supplies at a reasonable price, and challenging to get them in a reasonable amount of time.The good news is that supply chain issues have been reasonably sorted out; those delays shouldn’t hold home construction back the way it did for the last few years. The higher ticket price on supplies and workers seems to be here to stay. It is important to consider and evaluate the hidden costs when building your property; around every corner, another unexpected bill may be higher than intended. Be sure to find a builder that over-communicates. There is never too much communication regarding your home and the money you are putting into it. Make sure to make site visits and be present and available for conversations about changes that need to be made, delayed supplies, or updates required. Staying in touch will make you aware of any changing home construction costs.  

Banks and government

Interest rates have gone up a lot in a concise amount of time. The Bank of Canada raised its rate to 4.5% in response to inflation, which skyrocketed. The rising interest rate impacts construction in two ways: not only can buyers afford less of a home due to higher mortgage costs, but developers are pushed to scale back, or shelf projects entirely if they can’t finance the build or it becomes financially unviable.Increasing the interest rate is a common way to try and reduce inflation, and while it stings now, it should help everyone in the long run. It is, however, something to consider when looking at building your home.The BC government is working to make home construction smoother by streamlining the permit process. A one-stop-shop for all the necessary permits to build a house should reduce the wait times builders previously had to deal with by going through multiple ministries. This should hopefully reduce any delays to the completion of the house, which means you get to enjoy your home that much sooner. 

Buy or build?

There is no right or wrong answer when it comes to house hunting. Whether you decide to buy a home or build your dream home is entirely up to you, but whatever you decide, the Mayne Brothers are here to help.With a combined 40 years of experience in the Okanagan housing market, they can help you find the right path for your home-buying journey. To find out more, give them a call at 250-860-0303.


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