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Home prices in Regina have grown significantly in the past few years as Regina’s market has been adapting to The City’s growth. National reports indicate Regina’s housing is still one of the most affordable of Canada’s major cities, however, the sudden rise of housing prices still has many Home Buyers wondering what goes into the cost of a new home and who is profiting from these increases?
A Review of Home Construction Costs & Prices Report by the University of Regina Centre for Management Development prepared for the Regina and Region Home Builders’ Association (RRHBA) show a breakdown of costs comprise a new home and highlight factors that have driven these increased costs. The report indicates the price of the lot and the cost of construction are the primary reason for the increase.
There are multiple variables that drove the increase in the lot and construction. They include increased subcontracted service costs; higher standards for quality and amenities in both the development of new communities and construction of new homes; and increased government fees and levies.
Many factors go into the price of a lot. There is the price of the undeveloped land, the cost of planning and designing the new community, the cost of landscaping the new community and fees and levies. As we are experiencing, planning and designing a new community is much more involved and complex to ensure an attractive and safe community for its residents. These attractive amenities include accessible green spaces which are very visible, while some are not so evident, such as increased municipal standards for storm-water handling, but clearly important. Cities also impose fees and levies on the Developer to help recover the cost of its capital infrastructure to service the new community.
The increased cost is not all attributed to the cost of the lot. The cost of construction has also increased. Rising sub-contractor fees has pushed up the price of a new home as well as new municipal requirements related to Building and Fire Code.
Lastly, market trends for customized house plans and higher-end finishes also contribute to increased costs. New Home Owners are wishing to have their own unique lay-outs and finish their houses with higher end amenities, such as countertop and plumbing selections, all lead to increased house prices.