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

A single-family house in Vancouver under construction. (Shutterstock)

Land values in Vancouver are the overwhelming factor for housing prices, and market construction costs of building a new home on that parcel are also substantially high.

In fact, according to a new ranking by UK-based financial institution Capital on Tap, Vancouver has the world’s ninth most expensive home construction costs — $3,186 per square metre (10.76 sq ft) of floor area.

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This is just narrowly behind Seattle at $3,209 per square metre and Toronto at $3,201 per square metre, but ahead of Dublin at $3,101 per square metre.

The most expensive cities to build a home per square metre were Hong Kong at $5,779, London at $5,389, and Tokyo at $5,280.

Analysts evaluated the average sized homes for 50 global cities, and took into account a range of factors that contribute to building development costs, such as demand for materials, availability of space, and the availability of labour.

The pandemic’s impact on housing demand and global shipping has led the price of key materials such as rebar, timber, and copper pipe to increase by as much as 40% in some locations. These higher costs are, of course, passed on to homebuyers.

Capital on Taps’ head of growth Hugh Acland says 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,” said Acland.

And that is just the hard building construction costs. A 2018 study found that builders, property owners, and homebuyers pay an average of 26% more on their home price as a result of various government fees and taxes on a newly built home. Taxes and fees were not accounted for in the Capital on Taps ranking.

As another factor for total average house construction costs, Capital on Taps also analyzed which cities have the biggest average house floor area sizes. Vancouver landed in sixth place at 1,733 sq ft — just behind Sydney at 1,755 sq ft, but ahead of New York City at 1,701 sq ft. Seattle ranked 10th at 1,647 sq ft, while Toronto did not make it to the top 10.

Cost to build a home in global cities. Click on the image for an enlarged version. (Capital on Tap)

Most expensive cities to build a home per square metre

Hong Kong — £3,392 (CA$5,779)
London- – £3,163 (CA$5,389)
Tokyo — £3,099 (CA$5,280)
New York — £2,331 (CA$3,972)
Singapore — £2,288 (CA$3,899)
San Francisco — £2,161 (CA$3,683)
Seattle — £1,883 (CA$3,209)
Toronto — £1,879 (CA$3,201)
Vancouver — £1,870 (CA$3,186)
Dublin — £1,820 (CA$3,101)

Cities with the biggest homes on average

Melbourne — 202 sq m (2,174 sq ft)
Houston — 181 sq m (1,948 sq ft)
Atlanta — 178 sq m (1,956 sq ft)
Phoenix — 170 sq m (1,830 sq ft)
Sydney — 163 sq m (1,755 sq ft)
Vancouver — 161 sq m (1,733 sq ft)
New York — 158 sq m (1,701 sq ft)
Indianapolis — 156 sq m (1,679 sq ft)
(tie) San Francisco — 153 sq m (1,647 sq ft)
(tie) Seattle — 153 sq m (1,647 sq ft)

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