New Home Construction … the 2019 Federal Budget may Assist …

Ottawa, Ontario – March 20, 2019

Many young Canadians dream of owning their first home. With rising house prices, and not enough homes to meet demand, it is getting harder and harder to make that dream a reality. That is why the Government of Canada is taking important steps to make housing more accessible and affordable in Canada, especially for first-time homebuyers.

The Prime Minister, Justin Trudeau, today visited Orléans, Ontario, to highlight the First-Time Home Buyer Incentive, a new program announced in Budget 2019 that will make it easier for more Canadians to buy their first home.

Under the new program, eligible first-time home buyers could share a part of the cost of buying a home with the Canada Mortgage and Housing Corporation (CMHC). For eligible buyers, the program would reduce the size of their insured mortgage and lower monthly mortgage payments.

Lower monthly payments mean more money for Canadians to put toward the things that matter to them – furthering their education, putting their kids in sports, or saving for retirement. It is part of the Government of Canada’s plan to help all Canadians build a better future for themselves and their families.

Quote

“Over these past few years we heard from Canadians who talked about their concerns about being able to own their own home. We believe in investing in people and communities, which is why we are taking real, concrete steps to make sure homeownership remains an achievable dream, not a privilege afforded to only the richest few.”
The Rt. Hon. Justin Trudeau, Prime Minister of Canada

Quick Facts

    • The First-Time Home Buyer Incentive, administered by the CMHC, would help eligible Canadians with a household income under $120,000 per year afford to buy their first home.
    • Through the new Incentive, the CMHC would provide 5 per cent of the value of a home for a first-time homebuyer through a shared investment.
    • To encourage the construction of new housing supply, the Incentive would increase to 10 per cent for a newly-built home.
    • Additional information about the First-Time Home Buyer Incentive will be released by CMHC later this year.
    • Budget 2019 also proposes to increase the Home Buyers’ Plan withdrawal limit from $25,000 to $35,000, providing first-time home buyers with greater access to their Registered Retirement Savings Plan savings to buy a home.
  • In 2017, the Government of Canada announced a 10-year, $40 billion National Housing Strategy that will help reduce homelessness and improve the availability and quality of housing for Canadians in need. The Strategy sets clear goals to remove 530,000 Canadians from housing need and reduce chronic homelessness.

GC press release here

Building Costs – What to Expect

Owning a lot is only the first step towards sipping a Long Island Ice tea or enjoying some of PEI’s Craft Beers on the finished deck.

2018 C21 Price/Square Foot ($/sf) Survey - ALL Sales INCLUDING LAND.
2018 $/sf Survey
Including LAND

Building activity in the last few years has been brisk on PEI and finding a builder may be an adventure. Doing your homework and finding a good builder will result in years of satisfaction and enjoyment. Price is always a factor, but may not be the prime motivator for choice. Century 21 evaluated sales across Canada (both new and existing stock) to arrive at a Cost per Square Foot measure for cities across the country. Costs were for sale prices for all homes and INCLUDED land. Charlottetown costs were at $196/sf for the homes sold in 2018.

For calculation purposes, say the lot is $50,000 and the average home is 1600 sq. ft. At $196/sf a sale would be at $313,600 . Deduct $50k – $263,600/1,600sf = $165/sf (same as $50,000/1600sf = $31.25/sf deduct from $196/sf ) In this example, $165/sf cost would be for the home alone. Since the C21 results are for the entire housing stock, newly constructed homes would have a higher cost for the home. This agrees generally with 2019 ball-park estimates that NEW home construction on PEI is in the range of $200 per sf (excluding land). This is influenced heavily by the quality of finishings and interior decor, but provides a starting point to evaluate estimates. Here is a link to the Century 21 study with results across Canada (PDF Format) . NOTE again, the study home costs per sq.ft. INCLUDE LAND.


Other links suggest a building value could be under $200 per foot. However, they are costs in other provinces and with a rising market can become quickly out of date.

House Building Costs (Ontario) : (2016(?) – Rijus home plans):
“Generally, we find the ‘price per square foot’ rate to be around:
* $140 – $160 per square foot to build a house your own (self build)
* $170 – $200 per square foot to hire a custom home builder

How Much Does It Cost to Build a House? (March 2019 – Re/Max)

      • Vancouver: $130 – $230/sf
      • Calgary: $115 – $150/sf
      • Toronto: $110 – $210/sf
      • Montreal: $95 – $160/sf
      • Halifax: $115 – $150/sf

A link to information on Commercial building costs.


What About the Services ?

For those considering a lot purchase, keep in mind the total costs at the finish line. A drilled well will add up to $10,000 and even $20,000 to the final total. In Granville on the Water, you do not have this cost, as piped water is distributed throughout the subdivision. Together with underground electrical services, value and quality is elevated in the neighbourhood adding to peace of mind.

Home under construction in Granville on the Water early in 2019 … loving the view !

There are a number of ways to find a good builder on the island. Word of Mouth and recommendations from known friends, family, and regular acquaintances is usually a good way to avoid problems. That should find you a good builder, but perhaps not the best or not on your schedule ? As homes represent the biggest investment most people ever make, take your time to find the right builder …. check out past owners and their reviews and comments. Look at the product built by the builder and inspect the workmanship and quality that was put in place.

A few links to review for Builders and Suppliers :

GOTW – Origins of Homeowners Association and Water Utility

The Granville on the Water neighbourhood was started in the mid-2000’s. A Homeowners Association was registered, a Water Utility was registered and a pumphouse built with 2 wells, and the roads and common areas, as developed, are turned over to the Granville on the Water Homeowners Association Inc. (GOTWHA) The Granville on the Water Utility, Inc. that supplies drinking water to the lots is owned by the GOTWHA.

A document highlighting the By-laws and origins of the two companies, as well as the covenants and the neighbourhood governing documents for all owners may be downloaded by …..
 
Clicking this link to the GOTW Owners Info document.
(PDF opens in new window – 6.6MBytes)

Comments are welcome.