What are the costs of a new single family home in Alberta?
When builders start development of a new home, there are many different costs to consider. We conducted research to break down how these costs are distributed for a new home build and what that looks like based on the selling price of the home.
Let’s see what it costs to a build a house in Alberta.
What are the costs of building a new single family home?
8% Development Charges
This includes fees and levies imposed on new homes by municipalities. These charges cover the cost of additional infrastructure and services related to the new home, including roads, sewer, water, and municipal reserve dedication.
20% Serviced Lot Costs
This includes all of the on-site infrastructure required to service a lot such as roadway utilities (water, electrical, gas, phone/internet/cable), lanes, walkways, boulevards, etc., amenities built at the discretion of the developer and developer business operations.
14% Taxes & Fees
This includes building and development permits, property taxes, and other municipal fees, land holding costs related to permit and inspection timelines, and GST.
42% Construction Costs
The costs of building materials and labour required to construct the actual house.
8% Development Business Operations
This includes homebuilders activities and day to day functions conducted for the purpose of building and selling a home. The costs may include employee salaries, professional fees, office overhead, marketing, and sales.
8% Profit
Finally, the remaining portion of the price of the home is the profit. This is the difference between the cost to build the home and bring it to market, and the final sold price of the home.
Looking at the cost based on average price of a single family home
How much does it cost to build a house in Calgary?
In Calgary, the average sold price of detached homes is currently approximately $600,000. View market data for Calgary here.
Cost for builder
$48,000 Development Charges
$120,000 Serviced Lot Costs
$84,000 Taxes & Fees
$252,000 Construction Costs
$48,000 Development Business Operations
$552,000 cost to build a new home
Profit for builder
$600,000 - $552,000 = $48,000
$48,000 Profit
How much does it cost to build a house in Edmonton?
Cost for builder
$38,400 Development Charges
$96,000 Serviced Lot Costs
$67,200 Taxes & Fees
$201,600 Construction Costs
$38,400 Development Business Operations
$441,600 cost to build a new home
Profit for builder
$480,000 - $441,600 = $38,400
$38,400 Profit
Buy your own home without an agent and save in commission
Buyers who bring their own agent when purchasing a new home add commission fees for the builder on the transaction. On our example of a $600,000 Calgary home, this is typically $11,000. On our example of a $480,000 Edmonton home, this is typically $9,200. While it is technically the seller (builder) paying this commission, not bringing a buyer’s agent to the table enables homebuyers to have more negotiating power and can save money for both sides of the transaction.
Here’s an example: If the homebuyer offers $595,000 on a $600,000 home without an agent, they save $5,000 AND the builder still saves $6,000. Win-Win! In a hot seller’s market with competing offers on a home, this can give buyers a competitive advantage on offers that are otherwise equal.
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