Toronto ranked one of the most expensive cities in the world to build a home

Toronto residents are already very familiar with the high cost of building a home here, but the city has now officially ranked as one of the most expensive in the world.

A new ranking from the UK-based financial institution Capital on Tap delves into the cost of building homes in major cities all around the world. Toronto, with its average cost
of £1,879 ($3,195) per square metre ranked eighth.

Toronto came in behind other notoriously expensive cities like Hong Kong, London, Tokyo, New York, Singapore, San Francisco, and Seattle. But it wasn’t the only one of Canada’s major cities to make the list. Vancouver came in just behind Toronto as the ninth most expensive city to build a home with a £1,870 ($3,179) per square metre average.

Capital on Tap

The ranking took into account factors like the demand for materials, availability of space, and availability of labour.

“It’s not surprising that the most expensive places to build are also large cities where construction work is seemingly never-ending,” the report reads. “As a result of the pandemic, the price of key materials like rebar, timber, and copper pipe increased by as much as 40% in some places, the cost of which is naturally passed on to the end customer.”

According to Capital on Taps’ Head of Growth Hugh Acland, builders and buyers should brace themselves for continually high prices.

“As things have largely returned to normal for many industries, it’s likely that the construction sector will still be feeling the effects of the last 18 months or so for a while, meaning that it could be some time before construction prices normalize and return to pre-pandemic levels,” Acland said.

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The ranking also assessed which cities have the biggest homes on average. Although Toronto, with its thousands upon thousands of infamously tiny condos, did not make the list, Vancouver came in sixth with an average size of 1,733 square feet.

Melbourne, Australia, with its 2,174-square-foot average, has the largest homes out of all the major cities assessed for the ranking.