Construction Costs are No Joke!

We generally try to keep our newsletter upbeat and fun. We tried our best with this one, but talking about spending your hard-earned money is never a laughing matter. Renovating in Metro Vancouver can be a rewarding yet daunting prospect. While the allure of updating your space to fit your lifestyle and aesthetic preferences is strong, the costs involved can often be a rude awakening. In this newsletter, we’ll break down the why and what of construction costs and where we see costs going over the coming years.
·       High Cost of Living: Vancouver consistently ranks as one of the most expensive cities in North America. This high cost of living extends to renovation projects, where labour and materials are more expensive compared to other regions.
·       Labour Costs: This ties into the first point. Electricians, plumbers, carpenters, and other trades are essential for any renovation project and their rates reflect the local economy and their cost of living.
·       Permitting and Regulations: Strict (and frankly unaffordable) building codes and bylaws increase the time and cost of obtaining permits for renovations. Environmental and seismic changes to the building code have been two of the most significant drivers of cost increases for renovating. In the DNV, Stormwater Management recently surpassed both of those combined. Compliance with these regulations is required and adds to the overall expense. The costs of which can be most heavily felt in renovating homes located in Development Permit Areas (DVP) and new homes.
·       Supply and Demand: The demand/need for housing remains at all-time highs. Our population is ever increasing, yet our housing supply is not keeping up. Demand for materials and labour remains elevated with no end in sight. Both have seen increases well above reported CPI levels.
·       Environmental Considerations: Local bylaws place a strong emphasis on sustainability and green building practices. While these are commendable goals, they also add to the cost of renovations as eco-friendly materials and practices are generally more expensive.·       Complexity of Projects: Design and architectural details are one the largest drivers of construction costs. While they lead to amazing-looking homes, those details do not come for free. Added to that, most homes require extensive renovations to meet modern standards. Dealing with older structures and bringing them up to code can be complex and costly.

The What – All projects are unique and have different priorities. That said, here is a general historical breakdown of a completed renovation budget:

We don’t have a crystal ball, but as far as we can tell, at best, the overall costs of construction will stay flat.
Based on the demands for tradespeople and construction materials and speaking with other construction professionals, we feel like costs are more likely to continue to inch up.
What does that mean? If you are thinking about renovating, GET STARTED! If you are waiting for prices to drop, you could be waiting a very, very long time.

HOUZZ