Costs of Building a Home

“How much does it cost to build a home?”

This is one of the most common questions we receive – and for good reason. The cost of a home is a critical factor in narrowing down your available options.

When looking at the cost of building a new construction home there are two perspectives. You can look at the costs from the purchaser’s side in terms of model costs, homesite costs and extra inclusions to the home. You can also look at it in terms of land costs, building materials cost and labour & overhead from the builders perspective.

Costs From a Buyers Perspective
Costs From a Builders Perspective

Costs From a Buyers Perspective

Community and Homesite

Your choice of community, as well as your choice of homesite, are two key factors in the overall cost of your home.

The community you choose may have different architectural guidelines, as well as different foundation requirements both, change the price of the home. Some common architectural guidelines include front landscaping requirements, additional stone requirements, garage windows and upgraded siding colours. If your homesite is backing a park or on a corner, the developer may require that there is additional window trim or a rear deck built.

The homesite that you choose will also change the overall price of the home. Homesite pricing is set by developers so depending on the community the same size of lot may be a different cost. As well, the width of the lot, proximity to amenities such as parks and the lot features will all play a role. To view homesites, we have available visit our community pages.

Home Model

Perhaps the most obvious factor that affects the price of a new home is the model style. Starting prices for townhomes usually differ quite drastically from starting prices for a detached single-family home, for example. Deciding what type of home will meet your family’s needs is usually a good first step. Pacesetter Homes offers Townhomes, Duplexes in Saskatoon, Laned Homes in Regina and Front Attached Garage homes in both cities. Although Front Attached Homes are typically the most sought-after home type, many people will often opt for a detached garage home to allow more room in their budget for extra options.

Closely related to the home model factor, the size of the house and the floor plan will also influence pricing. Square footage is the key here. Typically, as square footage rises, so does the starting cost of the home.

While bedroom and bathroom count is often one of the first questions asked about a home, it’s less of an indicator of a home’s price than square footage. In many cases, homes with an additional bedroom or bathroom may be only slightly more expensive than homes without.

Extra Options

Every new home comes with a variety of standard features that can be upgraded by the home buyer upon request. Pacesetter Homes has carefully chosen our standard features based on buyer’s wants and needs in Saskatchewan as well as optimizing for energy efficiency and home affordability. We also offer customized options for those looking to build their home from the ground up with us.

Popular options include customizing interior door styles, adding under cabinet lighting, adding LVP to the second floor and adding a fireplace.

If you are looking to purchase a quick possession home there are still additional options for you including adding an appliance allowance to purchase your kitchen appliances and laundry using your mortgage. As well, we also offer back yard landscaping, deck building and basement completion services.

When adding most additional options to your home purchase Pacesetter Homes will give you what is called an allowance for this item. You will then select the specific item from the supplier and Pacesetter Homes will let you know the specific cost of that item. If what you have chosen is different than the amount of your allowance it will either be added or subtracted from the total cost of the home at closing. Say for example you have a lighting allowance of $2000. Once it came time to choose your interior light fixtures you would visit our lighting supplier’s showroom and pick the options that you would like. The lighting supplier would then provide Pacesetter Homes with your selection. If the cost of the lighting you chose was only $1500 then you would see a reduction of $500 on the home cost at closing.

Taxes and Rebates

In Saskatchewan, both GST and PST are charged on new home construction. Pacesetter Homes factors both of these taxes along with their applicable rebates into the price of a new construction home. This way you aren’t left to figure out how to claim your GST or PST rebate after you move in – Pacesetter Homes has already accounted for that rebate upfront.

CMHC Green Home Rebate – This rebate is for any new construction home that meets the eligibility standards. For Pacesetter Homes we use a 3rd party company to test many of our homes to determine if they are 15% more energy efficient than a typical new home. If they are, the home purchaser will qualify for a rebate of 15% of their insurance premium. Insurance premiums are paid on any mortgage with less than 20% of a down payment.

Closing Costs

The term closing costs refers to a variety of different items. Some of the most common closing costs are:

- Legal Fees for Lawyers – $650 – $1000

- Land title charges and other disbursements paid through the lawyer’s office – $250 – $600

- Home inspection – $300 – $500

- Property appraisals – $200 -$350

- Home/Fire Insurance – $700 – $2,000

- Property Taxes

It’s hard to determine how much these things will cost until you get serious about buying your home. Speaking with your lawyer, mortgage specialist and insurance broker will be the best way to determine the exact amounts you will pay for closing costs. Property taxes are also handled a bit differently depending on the time of year that you take possession of the home and if the property taxes have been paid for the year. Either way, a pro-rated amount will be determined at closing.

Costs From a Builders Perspective

Land Costs

Pacesetter Homes, along with the majority of builders in Saskatoon and Regina build homes on lots purchased from a developer. Developing land requires a few different costs. The cost of the land itself, servicing the lots with power and water, building roads, street lights and other infrastructure. Developers also include parks, playgrounds and other community amenities. Once the land is developed, Pacesetter Homes buy the land from the developer. Choosing which homesites to buy has a few factors including the location in the community, type of lot, size and shape of the lot and the price of the lot. We strive to have a variety of options for potential home buyers. Since we have a strong staying power in Saskatchewan we are able to get more land options for future sustained growth.

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Building Materials

As supply and demand change, both within the home building industry and outside of homebuilding, we are seeing price fluctuations for building materials. You can learn more in this article from the Home Builders Association discussing global supply chain disruption and how it applies to homebuilding.

Foundation

A home’s foundation may be the most important part of a home. It supports the whole home, resists movement, insulates the home and keeps moisture out. Our foundations are made of several components including concrete walls, drainstone and weeping tile and concrete piles where needed by engineering. The cost for a foundation is typically 12% of the total building material cost.

Framing

Since lumber is one of the main materials used in building a new home changes in lumber pricing affect the cost of the home the most. Pacesetter Homes has used our large buying power to get framing materials at lower prices when available. This is then used in future home builds and keeps our homes more affordable. Some of the components that make up the framing of a home include 2×6 exterior walls and 2×4 interior walls. Engineered roof trusses and floor joists. Pacesetter Homes uses open web floor joists on the second floor to avoid unnecessary bulkheads on the main floor. This helps your home feel more open and takes full advantage of the 9′ main floor ceilings. Framing and lumber costs make up 25% of the total building material costs.

Windows and Doors

Windows are made of glass and vinyl. Industrywide, window manufacturers rely on the same raw material suppliers. This means if there is a shortage in raw material it will affect almost all of the window manufacturers and therefore homebuilders. We are seeing both cost increases in windows and challenges getting window supply. This is due to a surge of new construction homes in the Canadian market.

Windows can also be one of the major heat loss areas in a home. This is why Pacesetter Homes chooses to use Triple Pane windows in all our homes. In total, about 3% of the building material costs come from windows and doors.

Plumbing and Heating

Plumbing and heating is a key component to comfortable living in your home. For this reason, we use an engineered mechanical design to ensure consistent temperatures throughout your home. We also use a high-efficiency furnace, programmable thermostat HRV and gas hot water heater. Together these items help to ensure the comfort of your home while saving you money on monthly utilities. Overall, these make up 8% of the total cost of building materials.

Electrical

Installing electrical panels and wiring is another step in the “rough-in stage” of home construction. Pacesetter Homes includes 100 amp service and 64 circuit breakers in our electrical panels. This is an ample amount for your future basement development. We also include Cat5 and Coax connections in the living room, bedrooms and bonus rooms. All in, 4% of the building material costs are attributed to electrical.

Insulation

Insulation is key to a warm home in the winter and a cooler home in the summer. A well-insulated home also saves money in utility costs throughout ownership. Pacesetter Homes uses Batt R20 insulation in exterior and frost walls, sealed R20 joist spaces, blown-in insulation in the attic to a value of R50 and Batt insulation in the floor over the garage at an R28 value. Overall, insulation costs make up just 2% of the total building materials cost.

Drywall

After framing, rough-ins and insulation the home is drywalled. Out of all components of building a home, this may be the one that the average buyer is most familiar with. Drywalling sets the stage for good interior finishes and is composed of hanging drywall, mudding and taping. Overall this is typically 5% of the building material costs.

Exterior Finishes

Exterior finishes include almost all of the items of a home that are seen from the exterior on a day-to-day basis.

This includes:

Siding
Stone
Decorative materials like Shakes, Trim, Board and Batton
Shingles
Concrete Driveways
Rough Grading to the property

Some communities have extra architectural requirements that increase the cost of a home. Although this may seem concerning upfront, it helps to maintain home values in the community long term. Exterior finishes make up 9% of the total building material costs.

Interior Finishes

The other major component of a home is the interior finishes. In this category, some of the items we’ve included are lighting, flooring, cabinetry, trim, interior doors, painting and tile. Each of these interior finishes comes from a different supplier and manufacturer. This means that there are many different steps in the supply chain from the product being manufactured to it being installed in our homes. Challenges with this supply chain can also cause delays on site. We know that homeowners value beautiful, quality interiors that work for their lifestyle. We always do our best to ensure that all of the components are in the home at the time of possession. The cost of interior finishing building materials is 32%.

Labour and Overhead

Every company has some amount of labour and overhead costs. For a home builder, we are referring to the costs of paying our trades. This amount is typically established through a tender process where different trades submit a bid or a quote for what it will cost to build the home. From there Pacesetter Homes decides on the best option for our company in terms of both quality of workmanship and cost. We are also proud to say we are one of few home builders who has a timely process for paying our trades once work is complete. This helps us work with some of the best in the business.

Overhead costs for Pacesetter Homes include items like our showhomes, office and design center, cleaning costs and homeowner experience. When buying a home it is ideal if you have the opportunity to view it before purchasing. But, with new construction homes, this isn’t always an option. This is why we have showhomes for you to get a sense of the interior finishes and layouts of our homes. Our interior design center in Saskatoon is also a key component in being able to choose your exterior and interior finishes for a new home. Having all these options available helps you make the best choice for your new home.

Cleaning of our showhomes, as well as homes before possession, is important now more than ever. We ensure that we hire professionals to do this work. Marketing is also a part of our overhead costs. We also want to ensure that our homeowners enjoy shopping for a home. We continue to use resources to make the process the best in Saskatchewan.