Residential Construction Costs in Ontario

One of the most important steps when planning a construction project is to determine the appropriate budget. There is not much information available to assist owners in their planning.

Often, projects derail due to bad planning and lack of knowledge. I have decided to write this article to inform and provide valuable insight if you consider starting construction any time soon.

Project Delivery Method

The delivery method is probably the most critical decision, and it should happen very early on in the process.

There are many different project delivery methods, but typically, residential projects often are either Design-Build or Design-Bid-Build. Both have advantages but deciding the one that better fits your needs will pretty much determine the next steps in developing your project.

Design-Build is when the owner contacts a GC (General Contractor) or Builder before hiring the design team. The GC will then establish the right team to deliver every stage of your project. This method’s main advantage is peace of mind, as you maintain one single line of communication.

Design-Bid-Build delivery method is when the owner hires the design team, develops the drawings, and obtains pricing from multiple GC’s and Builders through a competitive bid. The owner’s main advantage is the exposure to various quotes and proposals that guarantee the lowest price. The owner might not necessarily select the lowest bid, but it will give them a broader pool to choose from.

Renovation vs. New Build

The price points described below are based on scenarios with no constraints or issues related to the existing building or the site. Therefore, it is essential to consider the differences between renovating vs. building a new home when pricing a construction project.

I always recommend that my clients carry a contingency bucket of at least 10% of the overall construction budget for unknown issues that usually occur when renovating older homes.

Example of a standard wood frame residential build (c) Wallzcorp

Price Ranges for Construction

Your expectations in terms of finishes and overall level of craftsmanship will also have a crucial role in determining your project’s construction cost. Below are some ranges that will help you establish a preliminary budget for your project.

Standard construction ($200 – $250 per Square Foot)

Some residential contractors in Ontario are focused on a more standard type of construction with materials and solutions readily available and easily sourced in home improvement stores such as Rona or Home Depot. This construction type will allow you to build in a range between $200 to $250 per Square Foot.

At the $200-$250 per Square Foot range, you will get a wood frame with brick dwelling, asphalt shingle roof, galvanized gutters, and standard size windows, likely vinyl. You will also get a generic selection with any premium materials coming at an extra cost in interior finishes.

Semi-Custom Construction ($250 – $300 per Square Foot)

Suppose you are looking for a more specific type of build, still taking advantage of some standard features for cost control but adding some certain premium elements to the design. In that case, you might be looking at something between $250 to $300 per Square Foot.

With the rise of construction costs in Ontario, this range has become challenging. However, it is still achievable through smart design and some creativity. You will add some exterior stone features at this price point, standing seam metal, wood clad windows, depending on the brands.

Custom Construction ($300-$350 per Square Foot)

This is an excellent starting point for any custom residential construction with $300 to $350 per Square Foot, allowing you to have a broader selection of materials and finishes. Still, typically it will get you a brick, metal, masonry, or stucco on wood frame, metal or tile roof, and high-end windows with custom sizes.

This is also a price point where you can expect a high-end selection of interior finishes, stainless steel appliances, some custom fabricated pieces, specialty feature lighting, and maybe custom floating stairs, depending on the complexity of the design.

High-End Construction ($450 plus per Square Foot)

If you are considering high-end custom residential, it is safe to look at numbers that start around $450 per Square Foot and can go as high as your imagination can take you. You can design a fully customized project at this price point, using high-end materials and finishes throughout.

It is essential to mention that if you are considering building at this price point, it is vital to select the right General Contractor and Builder as this construction level requires a certain level of expertise.

Design Fees are examples of Soft Costs that should be contemplated in your budget.

Hard Costs vs. Soft Costs

When planning for a construction budget, it is essential to identify both hard and soft costs involved. Hard costs are typically physical assets you need to acquire to complete your construction project. Some examples of Hard Costs below:

  • Demolition (If you are planning on demolishing any existing structures)
  • Site Preparation (Removing trees, grading, etc.)
  • Construction Cost
  • Taxes
  • Municipal Permits
  • Landscaping

It is essential to identify all the soft costs and add them to your construction budget to avoid any unpleasant surprises when moving forward. These costs are not included in the construction cost and should be contemplated. Examples of the most common Soft Costs below:

  • Architectural Design Fees (Typically between 6% of the construction cost for a very basic set of construction drawings and up to 15% for a full-service set of construction documents)
  • Structural Engineer
  • Mechanical and Electrical Engineer
  • Optional Consultants such as Interior Designers, Energy Consultants, etc.

Good planning makes the difference.

When it comes to starting a construction project, I cannot stress enough how important it is to spend the time researching and planning, as it will pay off enormous dividends down the road. Residential construction costs are not that complicated.

As a rule of thumb, you can use the numbers I provided as a reference to get started.

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