SilverBeam Homes Blog

The cost of building your dream home in Canada will vary between provinces, but there are other factors. Prices can range from $120 to $250 per square foot, so the average cost would be $185. This takes the estimated cost for a 2,000 square foot home in Canada to around $370,000. When it comes to Vancouver, the averages are higher, ranging between $430 to $1090. 

Let’s provide you with the details and information as well as the necessary steps for constructing a home in Canada. This can help you to make the best informed decision for you and your household. 

The Real Costs of Building a Home

Cost # 1 – Buying Land 

Land is likely going to be your biggest expense when it comes to building a home. If you are looking in an urban area, you will find that land alone could cost as much as an existing home. This is why you often see real estate investors buying older buildings, demolishing them and rebuilding them from the ground up. But if you are willing to move out of the city and into a rural area, you will find land available at more affordable costs. You will be able to purchase a larger lot at a lower price, so you are left with more budget to build your dream home. 

Cost # 2 – Preparing the Land 

Now that you have sourced and purchased your land, you will need to clear any debris on the land. This could include rocks and trees, etc. Preparing the land also includes setting your foundation, and depending on where you purchased your land, you may have to connect water lines, add drainage systems and power lines. The latter tends to be necessary when you purchase land in rural areas that are still mostly untouched by civilization. 

These tasks will vary in cost depending on the land itself. There are some properties that will require more work than others based on the time of year, the current market etc. If you want an estimate, you can give us a call so we can visit the property and let you know what you can expect to pay if you choose us as your builders. 

Cost # 3 – Builders Risk Insurance 

This insurance provides coverage for worst case situations. This cover is important during a construction project, and during renovation projects as well. When you do not have this cover, worst case scenarios can lead to major losses. Sometimes this loss may be minor, but sometimes it can be major, such as irreparable damage to the structure of your home. 

What Does Building Risk Insurance Cover?

This type of insurance is ideal for when a building is being constructed. The insurance covers the building itself, as well as tools, equipment, machinery used in the construction of the building. The coverage offered during a renovation job is the same. 

When a building is under construction, it is exposed to multiple risks. Many of these are due to uncontrollable environmental factors, such as high winds or even flooding. And sometimes it’s just an accident that occurs, causing major damage. 

The policy price will often dictate the extent of what is covered or not. It also indicates what sort of damage is covered and what requirements need to be met before a payout can be made. 

Cost # 4 – Obtaining Building Permits

To build your home, you will need permits from your municipality. The fees for these permits vary from city to city, and different areas may have different cost structure setups. You can find the current schedule of fees as of September 2022 for the city of Vancouver here. 

Cost # 5 – Architecture Planning

It is recommended you reserve 12% of the estimated cost of your home for architecture fees. This cost again varies depending on where you choose to build your home. If you already have a home plan, this offers a reduction in costs by a few thousand dollars. If you would like to have a professional review your existing plan and make changes, this will incur a cost, but maybe not as much as having them create a whole new plan. 

Cost # 6 – Construction Costs 

The cost of construction mainly consists of materials and labor. The total costs have a lot to do with your choices of materials and the company you hire. As such, it is challenging to provide a cost estimate without knowing your specific needs, goals and dreams. 

Contact us today so we can help you build the home of your dreams. We can help you every step of the way and have a team of professionals working alongside us to help make your dream of owning a home become a reality. We will help you every step of the way, where we can’t assist you ourselves, we will put you on to a professional that can assist you at any stage or phase of the home building process. Give SIlverBeam Homes a call today!

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Crushing the housing market won’t help, what will help is the rebalancing of the housing market. The state of the housing market is one of the biggest challenges our country is currently facing. Meaningful housing construction acceleration is the way to go to fix the issues in the housing market. It is the key to helping prevent an entire generation from being permanently priced out of the housing market. 

A recent census showed that the fastest growing type of household in Canada is “roommates”. This is a big problem, but if housing prices fall too fast or too far, we will have even bigger problems. Even if prices decrease, rent and mortgage payments may still go up. 

We expect demand in the cities of Vancouver and Toronto to at least remain the same, but chances are it is expected to increase. More density can help to wrestle down prices, but this can’t happen overnight.

A house is the largest asset someone can own. Housing is costly in our country, and not many people are able to access or are willing to spend. A house can build your retirement wealth. Business closures and layoffs can cause people to miss mortgage payments. That, along with high-interest rates, can cause a big escalation. 

Building a Home 

Buying an existing house is not always more cost-effective than building your own. There is also the emotional fulfillment of getting everything you want in your home. When you build your home, you get to make the choices you wouldn’t be able to make when purchasing an existing home. But that isn’t the only benefit of building. Here are a few reasons it may be better for you to build your house than buy an existing one. 

Sustainability and Efficiency 

If sustainability and efficiency are important to you, then building a custom home is for you. Building a custom home now will provide you with a more energy-efficient home than even homes built ten years ago. 

Homes built in the 90 even tend to not have energy-efficient windows. If you purchase one such house, you would have to make these updates when you move in. if you don’t make these changes, you end up losing money on your potential selling price on your monthly utilities.  You will continue to pay those higher utilities until you can afford to do a renovation, and that can add up over the months and years. 

With global warming, sustainability should be high on your priority list when looking into the features you want for your home. 

Room for Growth 

Most people only move out of their homes if their family has grown or is growing. This can mean a new baby, an elderly relative or a child moving back home. When you build your home, you can cater to these possibilities instead of choosing what is available on the market, even though it may not entirely meet your needs.

You can choose the number of bedrooms you need or you can add on a guest house, a mother-in-law suite, or a basement with a separate entrance. The possibilities are endless.  

New Appliances – New Technology

We have all moved into a home with existing appliances, and there is always that one item that is faulty. If you haven’t had the best of luck, you may have encountered more than one faulty appliance in a move. 

When you build a custom home, you won’t have any faulty appliances, and on the off chance you do, you can send it back to the seller/manufacturer for a working one. Best of all, you will be able to choose from products with the newest technology to ensure that they truly enhance your life. 

No Concessions

You get to base your entire design on what you must have for your home, with no risk of this list being diminished, as long as you have the necessary budget to support it.  

Buying an existing home may seem more manageable, and it may be the norm, but you don’t have to take that approach when it comes to owning your home. We can help you build a house that will satisfy your needs and the needs of your family. Take a chance and let us help you make your dream home a reality. Take a look at our services, and then contact us when you are ready to move ahead. 

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Research shows home prices are at their least affordable in the past three decades. New buyers are facing a number of challenges, one of which is affordability. For many, it is a race to try and keep up with home prices. A race they are losing as home prices continue to increase. 

Property values have seen a notable drop in our market and many other markets year to date. But prices are still higher than their pre-COVID levels. The onset of the pandemic caused a housing market boom in Canada. 

In August 2022, the Housing Affordability Index showed that Canadians had less affordable homes available to them. The available numbers were fewer than at any point in the last 30 years. Many Canadians are now left with the sad reality that owning a home is now out of their reach.  

The National Bank noted in August that Canada was seeing its “worst deterioration” in affordability in 41 years. This was for the second quarter of this year alone. This was the sixth successive quarterly decline. The National Bank further indicated that on average 63.9% of income was necessary to maintain a mortgage. This level has only been seen in 1982 prior to now.  We can blame rising internet rates for this. This further caused a significant slowdown in the market, causing home prices to slide below 12.8%. 

Vancouver was among the cities to witness the biggest deterioration in the second quarter. The most modest declines were registered by Calgary and Quebec. 

What to Expect 

The National Bank noted that with home prices falling and with the five year mortgage rate being stabilized, affordability could improve as we close out 2022. 

Robert Hogue, economist at the Royal Bank of Canada, predicted that home prices are likely to hit their lowest in spring. We expect to see the most significant price declines in Ontario and British Columbia. 

What HomeBuyers are Doing 

Many homebuyers are now seeking co-signers for their mortgages. While this is an unconventional method, it has gotten popular with the affordability challenges that people are facing. While it may not be fun for you to ask a parent or friend to co-sign, it is what can help you get into the housing market, and that for many is worth it. 

Cosigning is also beneficial to the lender as they reduce their risk because they are loaning to you a first time homebuyer so if you run into difficulties paying you have the option of the co-signer stepping in to make those payments for you. The lender has the additional security with a co-signer that can boost your chances of getting the loan. 

As a matter of fact, the Canadian Imperial Bank of Commerce revealed that close to the end of last year 30% of new buyers had help from a family member or friend when purchasing their home. We see gifted amounts increasing as the prices in the market surged up. ⅔ of new buyers received a financial gift to add to their principal source of funds. In fact, over $10 billion was provided in gift payments, according to one report from the CIBC. The report also indicated that 5% of the relatives doing gift payments were doing so through debt and for the most expensive markets in Toronto and Vancouver. 

Other Options for First HomeBuyers

If you feel like you have been priced out of the market and have no options for owning a home. Don’t give up just yet. Contact us here at SilverBeam Homes and let us help you see through the possibility of building your home from the ground up.  

When you work with us, you can build a customized home that specifically meets your needs, and we work with you to stay on and under budget while giving you the best home to move into. If the market is currently giving you the blues, all hope is not lost. Call us and let us talk. 

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The housing market in Canada continues to surprise us for both buyers and sellers. Buyers have seen the highest prices and have heard about price corrections for home prices. But have we seen this? Is it possible that the new year will bring a change for you, so you can get your home?

Right now, the truth is, understanding the housing market is hard. But we can start prepping for the next year by thinking about some things. Supply is always a big factor in home prices, and sellers are nervous about what kind of returns they will be seeing for their assets. As such, some will hold off listing their homes when they can. 

Sellers never want to sell in a low market. But it is usually during this time that buyers are out in abundance. Included in this group are resellers. This would be the opposite of what we saw this past February. What this could mean is low housing prices all across Canada, which would drastically impact supply in a negative way. 

For Buyers 

First time buyers are frustrated, as there aren’t many potential homes on the market for them. Many of the houses currently going on the market have had the same owners for over 30 years, so buyers can see their budgets disappear, especially if they need renovations. Often potential buyers find something, but when they see the work that is required, they find themselves running into difficulties because their lender may not be able to finance and insure the property. 

For Seller’s

Sellers may be feeling less frustration than buyers, but that is until their properties are not selling. We can expect to see a shift in what it means to own property. Families are selling off their assets, and new generations are taking action towards homeownership. In the current housing market, there is really no perfect time to make a move. 

Those looking to sell need to find and work with an agent who can help them develop a strategy for bringing a home to market. They should put you on with a clear vision on the values for your area, and let you know of any barriers that may be present to make your property more desirable, as well as what could make it less desirable, so you can avoid that. 

Buyers may need to take a look at their options outside of buying a home. One option could be to build a home with us. Contact us to find out more about building your dream home from the ground up. 

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The soaring house prices we are currently facing are expected to drop sharply next year. But this price drop may still not make houses affordable since the Bank of Canada keeps raising interest rates. 

Near zero interest rates and already high prices in one of the hottest housing markets in the world will fuel the decline in prices. Average prices have risen this year by 10.3% but this is slower than the pace of the previous which was 11%. 

The hike in interest rates brought on by the bank of Canada in March has caused a 6% decline in prices. But it is expected to take years for affordability to set in. In 2023 we are expecting the average house prices to drop by 7.8%. This is a significant drop since the last prediction three months ago was 2.2%. If we actually see this decline, it will be the biggest decline since 2005. 

Price Drops Expected in Different Cities

The forecast for Vancouver and Toronto  predicts prices will drop by 7.3% and 8.5% respectively. While the pandemic is not over, the pandemic-era of the housing market boom is. The bottom is likely months away. 

The 100 basis point rate hike by the Bank of Canada on the 13th of July disqualified buyers from getting a mortgage. We expect the next two rate announcements to continue to cool things down. The only thing not cooling down is consumer price inflation. It is expected to remain high for some time reaching an almost 40 year high in June of 2022. 

The Disconnect Between Home Prices and Income

Home prices have been far disconnected from rent and income for quite a while. Even if there was a benchmark fall of 30% across the nation the pre-COVID prices which were not even affordable to begin with is where we would end up. But now, buyers are faced with higher interest rates than those of 2020. 

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The second quarter of 2022 has taken a new shift to the worse, according to a new report. Housing affordability is now at its worst in 41 years. The report in question was published last Tuesday by the National Bank Financial Markets. 

The information from the report shows data for 10 housing markets. Affordability was gauged by calculating a mortgage payment as a percentage of income. This compares the average home’s mortgage payment to the median income.  

Housing prices were rising in the second quarter, while affordability was deteriorating. While this was going on, mortgage interest rates were rising. The median home price across the areas in the report was at $810,985 in 2022’s second quarter. For a home of that type, the typical mortgage payment would be $4,166. This reflects an MPPI rate increase of 63.9%. This is the highest it has ever been since 1981. 

The increase from the previous quarter is 10.4% points, which is coming from 19.1% in the previous year. The average MPPI rate has been 40.7 % since 2000. There are a couple of the urban areas included in the study that have MPPI rates that are higher than 90%. 

What The Numbers Look Like in Different Areas

The MPPI here for non-condo homes was 121.2%. Condos has a MPPI of 51%. The combined MPPI is 96.9%. 

The capital of British Columbia is Victoria, and they showed similar numbers. The MPPI for here is 95.6%, with non-condos having an MPPI of 102.5% for non-condos and 52.9% for condos. 

In Toronto, the MPPI for non condos is 98.2%, whereas for condos it is 53.3%. The combined MPPI for the Greater Toronto is thereby 91%. 

In Hamilton, the statistics are close to the national Canadian average. MPI rates were 50.1% for condos and 71.1% for non-condos. 

Middle of the Pack

Montreal has a non condo MPPI of 50.1% and 33.9% for condos. 

Ottawa-Gatineau saw a 50.9% rate for non condo homes and 28.6% for condos. 

The Most Affordable Places to Buy a Home in Canada 

Quebec City and the Prairies are proving to offer the most affordable housing markets in Canada, according to the report. 

In Winnipeg, Edmonton, Calgary and Quebec City, the numbers are between 30 and 37 percent for non-condos. For condos, the MPPI’s are around 15 to 29%.  

Recent slowdown in the housing market is good news for those who are looking to purchase a home. This is because housing affordability is forecasted by the bank to improve, with a 10% decline in the price of homes in the coming months. There is also the benchmark that five-year mortgage rate stabilization will help to improve affordability before the end of 2022. 

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Interest rates in July took another huge toll, causing Canada’s housing correction to run far and wide. Housing markets across the country have seen a deepened downturn. This is quickly turning into the sharpest drop in the past 5 decades. 

With prices sliding fast, fear is fast replacing the exuberance many of us felt earlier this year, especially in Vancouver and Toronto. These cities saw outsize price gains and stretched affordability during the pandemic, and as such are at the highest risk. 

The Toronto pullback is already obvious, with the frenzy of last winter already gone. Housing activity is currently at its slowest pace in 13 years, except for April 2020 when we first had to live through lockdowns. 

Inventories that were previously rock-bottom have now risen to a year over year high of 58%. Since March of 2022, the composite MLS Home Price Index for Toronto has fallen by 13% to $1,160,000. 

Buyers Reactions 

It is expected that buyers will be on the defensive in the months to come. This, as they have rising interest rates and poor affordability to deal with. They may be able to get further price concessions, especially for properties in the 905 built, where prices had increased exponentially during the pandemic. In the city of Toronto, condos have continued to remain relatively resilient. 

Vancouver’s housing market has been repeatedly cooled off since this spring, with rising interest rates. This has caused a drop in activity of 40% in the last 4 months. Prices have started to weaken, and the composite MLS HPI has seen a decrease of 4.5% since April. 

The Royal Bank of Canada believes that the city’s correction is still at early beginnings, and that buyers in the region will have to face pressure with rising rates as expected affordability starts to become suffocating. Single-detached homes will feel most of the pain, while condos will remain resilient. 

What is Happening Outside of Vancouver?

Some buyers have seen a great reduction in their buying power, and this has caused many of them to back out of the market, or out of their house search. This downturn may be contained in just some parts of the country, but we cannot ignore it. 

In Calgary, for example, we have seen activity that is still above the pre-pandemic levels, but with property values now starting to ease, buyers may be able to get into the market there. With the higher interest rates, buyers have changed some of their needs or have decided to renege some of their wants. They are looking for more affordable options, like single detached homes and condos, etc. 

Sellers are hesitating too, and so supply is also dwindling. The composite MLS HPI for Calgary has dipped since its peak in May. The same course of action is expected in the near future with the RBC. Tight demand and supply will help to support prices offering positive demographic and economic fundamentals. 

Montreal 

Montreal is seeing activity moderated, with home sales standing at 17% below the pre-pandemic levels. Rising inventories and calmer environments have brought around some amount of balance in the market. 

Single family condos and homes have seen a fall in median prices month over month. Property values are expected to ease in the close future. The market will adjust to higher interest rates. The downturn is expected to intensify and spread further. Buyers are waiting to see what will happen with lending rates.  

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The construction industry and companies like SilverBeam Homes are currently pressured by the cement shortage. 

Cement, a necessary ingredient for concrete, currently in short supply, so we are seeing delays piling up. We are not the only ones behind right now. While we are waiting on deliveries, other like companies and providers are waiting too. 

When concrete contractors can’t keep up with the supply, we can’t get the tools we need to continue our construction projects. We have schedules to meet, and these delays impact our scheduled deliverables to our clients. 

What Is the Cause of the Concrete Shortage?

The ready mixed concrete Association of Ontario indicates that the culprits are:

1. Increased prices
2. Increased demand 
3. Labor shortages

With many cement plants having equipment breakdowns and malfunctions, there has been a disruption in supply. Some plants saw these issues in the beginning of July, causing projects to be delayed and some even canceled. 

With production slowed, it has been hard for us to stay up to task. With the issues of finding concrete, our project costs can change, which no customer wants to hear right now. The worst part, it seems we are still in the early stages of the shortage. 

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There are some consumer protections being entered into British Columbia that should help new homebuyers entering the housing market. They made it their objective to outline exactly what those protections looked like before they were released. 

The details of phase one were announced. The provincial minister made the announcement at a news conference in Vancouver on July 21, 2022. The measures she described are a definite first in the country. And definitely will protect home buyers from the higher risks of the housing market.  

Many home buyers feel like they need to waive all conditions when they are buying a home. But these new legal protections will come into effect on January 1st, 2023. This protection will provide home buyers with a non-waivable protection period after their offer is accepted. 

There are fees, so the seller is protected to some extent if the buyer chooses to back out. There is a rescission fee of 0.25% of the purchase price of the home. So the seller would get to keep some of the down payment for being inconvenienced. 

Introduction as a Cooling-Off Period

Anyone who doesn’t take advantage of this will only have 3 days to arrange financing, home inspection, and other things necessary to complete a home purchase. Buyers still have the ability to make offers, find financing, and schedule home inspections, but the protection period will give them some additional time to ensure they know what they are getting into if they are working with a condition free offer. 

The provincial government consulted with the British Columbia Financial Services Authority before creating their final plan. They also consulted with realtors, appraisers, inspectors, financial experts and legal experts.  

The BCREA’s Take on the Plan

Even with all the consultations, the plan is still being seen as controversial. This year, the British Columbia Real Estate Association called the plan ineffectual. They also indicated the plan was finalized without enough consultation. 

The British Columbia Real Estate Association’s CEO indicates their extreme disappointment in the policy. They indicate it goes against the advice recommended in May for consumer protection measures as a part of an overall package, instead of this a la carte style. 

They see this decision as one that undermines the independence and expertise of the regulator, and that the policy addresses concerns that have changed since the first time the cooling off period was brought up.

The BCREA doesn’t believe that the plan will stand up to the test of the market conditions which are ever changing. They additionally indicated that the best protections could not come from government interventions, but from the BCFSA’s research and decision-making. 

Without that, there is no real positive change to be expected, Koot said. The BCREA estimates that 10% increase in bids is caused because of this new system, and they indicate this will drive up prices. 

The Good and The Bad Of the Policy

One of the biggest failures of the policy is its failure to address housing affordability’s root cause. This is the lack of housing supply in the province. The plan does however give home buyers some peace of mind, and it does this will also protect the seller’s interest.   

Another good is that the province indicates they will be monitoring the impacts and will continue to study advice from the BCFSA. 

What’s your take on the policy? Are you excited about the change and the possible benefits to buyers and sellers?

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Just a week ago, the Canada Housing and Mortgage Corporation announced 260 new homes. Of the 260, only 86 of them were considered affordable. With 2 million Canadians currently priced out of the housing market, this announcement was nothing short of an insult. It seems the powers that be are more interested in protecting the status quo and are not focused on disrupting a dysfunctional market. 

This isn’t unfamiliar ground though. The last time the government invested a sensible amount into co-operative housing was in the early 1990’s. So a $1.5 billion dollar investment by the government is the biggest investment in 30 years. How far will this investment go? It will go into 6,000 new co-operative housing units. The truth is that City Councils in Vancouver, Montreal, and Toronto are refusing to end exclusionary zoning. 

Young Buyers Suffering the Most

Who is bearing the brunt of all this? Younger buyers who have put all their chips to the middle of the table. These young buyers are now experiencing rising mortgage payments and are watching as their equity disappears. Even those who were waiting for the market to get better find themselves getting behind, with rising rates crushing their ability to afford their potential home. 

First time homebuyers are not seeing too much of a break, and existing homeowners are realizing an erosion in their equity as much as 30%. 

It has been a long time since we have seen a major housing announcement that helps potential homeowners get into their home. What we can’t have is business as usual. Until our government is willing to accept lower prices in British Columbia and other key markets to lower housing prices. 

Until our government is willing to make the decisions that will be unpopular, you do have the option to build your own home. Here at SilverBeam Homes, we can help you with that. Give us a call today, and let’s see how we can help you make your dream of owning a home a reality. 

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