Custom Home Construction Cost

Updated: January 2021

Again this week we got asked the question: “What is the cost of building a custom home?”  Usually, the homeowner is looking for a per square foot price.  And as always, we didn’t have a short answer to the question.

Before we start discussing the cost of building a custom home, let’s start with a definition.

"A custom home is a one-of-a-kind home that is designed for a specific client and location."

Typically, a custom home tends to be more complex from a design and a finish perspective than a typical subdivision built home.  Homeowners tend to upgrade on the finishes, and look for design details to give their home a unique look and feel.

Here’s what goes into the cost of a custom home:

1.     Size of House

The size of house will affect the cost of building a custom home.  Obviously, the larger it is, the more it will cost in total dollars.  However, the larger it is, the less it will cost per square foot.

As room sizes increase, the amount of materials that go into building the room don’t necessarily increase at the same rate.  For example, a 10’x15’ foot bedroom is 50% bigger that a 10’x10’ bedroom, yet only uses 30% more drywall.  And the door to the bedroom is a fixed cost, regardless of how big the bedroom is.  But, the flooring does increase in direct proportion with the size of the room.

So while a 2,000 square foot house may cost $300 per square foot to build, a 3,000 square foot house may cost $275 per square foot to build.

2.     Complexity of Design

This relates to the design and the style of the house, specifically the architectural features of the home.  For example, complex roof lines and vaulted ceilings impact on both the amount of labour and material required to complete the work.  The more exterior corners a house has, the more peaks and valleys in the roof, the steeper the roof, the greater the cost to build.  And, a bungalow will cost more per square foot that a two storey home – twice as much foundation, and twice as much roof.

3.     Systems

These are the items that are in the walls that you will never see, and the items in the mechanical room.  The typical home will have fiberglass insulation and a gas furnace.  A custom home may have more expensive spray foam insulation, and high efficiency furnaces may be combined with air exchanges and electronic air cleaners, and in floor heat to increase the level of comfort for occupants.

4.     Quality of Finishes

This relates to the finishing material that are used.  Type of exterior finish (ie: stone vs. brick) and interior finish – flooring materials, kitchen cabinetry, countertops, and plumbing and electrical fixtures all affect the final price.  Likewise, labour costs can differ by type of material – marble and travertine tile are more expensive to install than ceramic or porcelain tile.

5.     Site Conditions

Site conditions have an impact on cost.  One of the primary considerations is the amount of working space.  Is there space on site to store materials, machinery, and a dumpster?  Proximity to other houses may impede the ability to set up scaffolding.  Tree protection is also an issue in many municipalities, and the presence of a large tree that has to be protected impacts on the amount of available workspace around it, and the ability to use larger machinery.  The exact same custom home will cost more to build in Toronto than it will on a rural property in Caledon which has ample working space.

6.    Design

A custom home is, by definition, a one-of-a-kind home designed for a specific client and location.  While stock plans sometimes serve as a starting point for discussions, the designer or architect is ultimately creating a specific design for one house.  Design costs can include architects, engineers, and interior designers, depending on the level of design and service the homeowner is looking for.

7.     Municipal Charges and Services

Cost of water and sewer connections, electrical and gas hookups all need to be considered.  Land that has never been built on may be subject to development charges, and there are always building permit costs to consider.

So what does a custom home cost?

Most custom homes will work out to cost in the range of $250 square foot to $400 per square foot, depending on size, design, systems, finishes, location.  But we've seen many homes where the cost is much higher than this range.

This does not include design costs, services and municipal charges which will vary widely based on the individual lot characteristics.  A builder will look at the plans and determine what goes into building the home to come up with an accurate construction price.