Why will building or renovating my home cost so much? Whether you have experienced ‘sticker shock’ after talking with a builder or designer, or you are aware of the costs of building – but don’t understand how they accumulate to such a figure – here are some of the reasons why taking on the construction or renovation of a home costs what it does.
The first factor driving the cost of your home project is the scope of the work. How big is the new home, or how extensive is the renovation? For new builds, it is common for people to underestimate the size of home they need; the expected square footage is often not sufficient to fit in all the wish list items. Also, many people go into the process with the intention of designing to the maximum allowable size. There are several reasons for this, but a main one is the resale value, a slightly larger home on the same lot will fetch more when sold because it holds more potential for a wider audience of buyers.
However, it is important to keep in mind that the overall cost and the cost per square foot do not move in parallel. A large home will cost less per square foot than a small home – as large homes possess more vast space, but a lot of that space is empty. The expenses are driven by the walls and the things that go on the walls (the tile and detailed finishings, the millwork, the cabinetry, any formal moulding and trim details, the plumbing and lighting fixtures. While there will be more of these items in the larger house, there is an ‘economy of scale’ in play, meaning that a 3,000 square foot home will cost drastically more per square foot than a 6,000 square foot home. So, don’t go thinking that the best way to save money on your home project is to build the smallest house you need.
Another factor that can increase the price of your home is its style – both architecturally and the layout. Detailed traditional houses boast more details, both inside and out, with endless mouldings and paneling and decorative detailing to drive up your budget. Houses with numerous large windows and large expanses of glass walls optimally sited for a view drive costs notably. On the flip side, a super modern home with clean lines can be quite expensive as the precision and details needed to achieve this aesthetic requires higher end framers/trades which just cost more. There is nowhere to hide little mistakes in a sleek modern home.
Style of house aside, a complex building site itself can become a massive investment – costs in preparatory work such as grading and backfilling, or even accessing a more remote site to get building materials into it can add substantially to the price of the project. These costs are rarely, if ever, mentioned in early estimates and so often come as a shock and have even been known to de-rail projects – the right lot can be worth this preparatory investment, but it is certainly worthwhile doing a cost analysis and investigation early in your planning.
The energy efficiency of a home also significantly impacts its price tag. A home built to basic standards of the building code versus one built to top standards of Net Zero will have drastic differences in price – so these decisions need to be made early, as they affect not only the build, but also how the permit drawings are prepared. Changes to this aspect of your project midway through would have some drastic chain reactions for your budget including re-design – so determine early on how important this aspect is to you and your family.
Cabinetry can be one of the larger ticket items within the cost of a home build. Adding custom millwork and built-in cabinetry throughout your house is a sure way to have your cabinetry costs become higher than you expected. Cabinetry is often the most under-budgeted item we see in the homes we design.
Finishes are the favourite scapegoat for budget creep – and while they can blow your budget, as can anything gone overboard, they don’t have to! They tend to get a lot of negative attention, because they come into play towards the end of the project and can be replaced by something perceived cheaper. However, regardless of the quality of the finishes, the installers – painters, tilers, millworkers, plumbers, electricians – come at a premium and get paid regardless of the cost of the finishes and their bill can often trump the amount you paid for the finishing elements themselves.
Expensive finishes are rarely the cause of being over-budget – and if you have planned properly, they certainly don’t need to be – because you should get to have the things that you like when they are properly planned into your budget from the start.
Having builder pricing input as design progresses is very important to ensure you stay on track and are realistic about what the costs could be. But having the complete design is the only way to know just exactly what you are looking at when it comes to final bottom line costs. For this reason, a complete set of design documents is vital; once you have your home design and interior design completed you should go back to your builder to have your rough costs re-evaluated and firmed up. With firm decisions in place, and depending on how much time has passed, your early estimates may not be valid anymore.
There are many factors driving the cost of your home construction or renovation…
proper design and planning are the best way to keep costs known and under control.