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The Canad condo industry is among the most flourishing real estate markets in the world.
Both Canadian residents and immigrants are seeking affordable, modern homes. Condominiums are the best choice for many of them as detached houses are expensive or somehow off-grid, and also apartments can not be bought/sold separately.
That’s exactly why you can see lots of huge condo projects all over Canada. Also, there is a fast-growing market of condo assignment deals in Canada, creating new opportunities for investors and homebuyers.
Since the cost of some of these condominiums is really high, many condo buyers ask questions about the reasons.
The total condo project cost can be divided into three major sections:
- Land cost
- Hard cost
- Soft cost
You need to know that the cost of constructing a condominium is an average of $85 to $200 per sq ft without considering the cost of the land.
The construction cost can vary by region in Canada and also by the material and amenities you choose.
We decided to break down some more details of building a condominium in Canada.
The Margin of the Developer’s Profit
The first question to answer is how much the developer’s profit is. In the construction industry of Canada, the gross margin for a company is between 12 and 20 percent.
This might be useful to know that the margins can be 42% for remodeling teams, 34% for some specialty jobs, and 20% for new home construction.
So we see what developers are charging us is not a big deal, and we should look at other sectors.
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- Real Estate Investment Options for Foreigners in Canada 2021
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- How The Right Furniture Can Optimize Your Condo’s Space
- Making the Right Decision: All About the Condo Life
The labor cost is a crucial part of construction cost. Here is a breakdown of the labor cost when it comes to constructing a condominium in Canada.
- Carpenters, excavators, and masons charge you an average of $70 per hour.
- Electricians demand an average of $65 – $85 per hour
- Painters earn around $20 – $35 per hour
- Plumbers get $45 – $65 per hour
The land cost is definitely an essential reason for increasing the total price of a condominium.
With an unprecedented increase in the number of cars, the demand for parking is constantly rising. This has affected the cost of land, and subsequently, the cost of a condo building.
You can see a fight among developers for owning a site to start a new project. The cost of a normal site in Vancouver and Toronto is around $200 per sq ft.
If you compare this amount with the labor cost, you can see the importance of having a good site for your project.
The hard costs are strongly dependent on the number of storeys.
You can consider that as follows:
- 1 to 6 storeys: 195 -265 CAD
- 7-12 storeys: 215 – 280 CAD
- 13-39 storeys: 215 – 290 CAD
- 40-60 storeys: 235 – 290 CAD
- 60+ storeys: 275 – 330 CAD
Soft costs comprise any expenses that cannot be included in the construction process. For instance, sales, advertising, marketing, commissions to real estate agents, permissions, zoning, and legal costs, are among the most common soft costs.
There are also some other costs for specific regions. For example, in Toronto, the development fees also have to be included, which is around $17,644 CAD per unit.
Although this might make a huge difference between the soft costs of various regions, we can estimate an average amount for Canada.
The average soft costs in Canada can be considered around $150 CAD per square foot per unit for a condominium project.
Some More Details on the Construction Costs
You also need to know if it is really worth it to pay such prices for a condo. For example, an architect in Toronto earns around 10-17% of the total budget of a condominium project.
An average architect will usually:
- Estimate the scope of the condo project
- Offer a preliminary budget
- Provide the outline and plans
- Creat the detail design along with drafting floor plans
- Finalize the as-built plans and the construction documents
- Overlook the process of construction
Also, a contractor will:
- Provide the building material
- Hire employees and subcontractors to provide the services
- Suggest revision ideas to meet the goals sooner and better
- Do the final cleanup
- Take care of all the permits
A contractor will usually earn an average of $85 per square foot in Canada.
After all, is said and done, we have to sum up and see which part is charging more.
Ane average cost of constructing a condo building in Canada is:
- Land costs: $200 CAD per sq foot
- Hard costs: $330 CAD per sq foot
- Soft costs: $150 CAD per sq foot
As a result, the average cost of constructing a condo in Canada is around $680 per square foot.
This is just a low consideration, and of course, if you want to have a luxury condo in a wealthy area, the cost might increase to a total of $850 CAD per sq foot.
Adding the developer’s cost, the average cost of buying a condo would be around $1000 CAD per sq foot.
Now, you have a good overview of the costs of condominiums in Canada. This will help you decide better when it comes to buy or rent a condo because you can compare it with the average rate.
Try to consult with seasoned realtors to avoid wasting time and money. Also, if you want to invest money in this ever-changing industry, condo assignment deals can be of great use.