If you’re looking for a new home, one of the most significant crossroads you can be stuck at is pondering whether you should build a house or buy a house. With Markham’s real estate market fluctuating from year to year, many people take it into their own hands to build their own homes. Especially if you’d like it to be custom-made and will be your “forever” home. Many buyers love the older and established communities of Markham, but prefer newer, modern homes with open concept designs and luxury finishes. As a result, Markham has seen an influx in the demolition of older homes in highly desirable neighbourhoods such as Main St. Unionville in the past years. More and more people are choosing to transform their properties into one-of-a-kind homes.
No matter the situation, it’s worth looking into both alternatives when making the decision. This begs the question, how much does it cost to build a house in Markham?
Disclaimer: We are a real estate brokerage. Contents of this article are drawn from research. If you are interested in building a home, please obtain professional advice from a contractor.
1) COST TO BUY LAND
If you’re looking to build a house in Markham, you must first acquire the land by buying a house that is already listed for sale. The average detached home in Markham, according to the MLS “Market Watch” released as of January 2020, is $1,199,087. Realistically, you would like to buy a house for much less as your main concern should be the lot that the house sits on rather than the actual house.
As per MLS’s active listings for detached homes in Markham for under $900,000, there are currently six listings. The average price out of the five is approximately $850,000, and so we will use this figure as an example.
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The cost to close on land include legal fees and other one-time expenses that are incurred as part of purchasing a home. As per this example, approximately $184,975 would be necessary to acquire and close on land that’s priced at $850,000.
2) COST TO TEAR DOWN A HOUSE IN MARKHAM
Once you’ve acquired the land, the next step is to tear down the house and rebuild it. You would need to hire a builder and work with the lot of the existing property. In order to save some money at this stage, you might want to preserve the foundation and frame of the house. Others may prefer to completely demolish the existing home and start anew. At this stage, you could expect to spend around $20,000.
3) EXTRA FACTORS TO CONSIDER
Depending on the type of home you’re rebuilding, your costs may vary. For instance, building a bungalow costs more than building a two-storey house because of its more expansive footprint. Your costs are nearly doubled!
Finishing your basement will also be an additional cost, as well as the types of material you’re using to build. Of course, the more luxurious finishes you seek, the more your expenses rise.
You’ll also have to consider the timeline it takes to build your home – sourcing architects, construction costs, applications to the City of Markham for building permits, and more – all take time.
4) COMPARE THE COST OF BUILDING A HOUSE VS. BUYING A HOUSE
Now that all the essential costs and factors have been considered, the final question is: should you buy a house or build a house?
As mentioned earlier, if you’re looking for a detached home in Markham, the average price is around $1,199,087.
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Now that’s interesting! The cost of building a house in Markham is almost twice the cost of buying a home. However, there are other factors to consider. Your monthly mortgage will be approximately half of what you would be paying if you were to buy a house.
5) LONG-TERM VIEW
An advantage of building your own house is that if you sell after a few years, you can sell it for much more than what you paid for it. In this case, you could make a profit in the long-term. On the other hand, it costs almost double to build a home than to buy a new move-in ready home. It depends on your financial situation and whether you want to gain market equity.
There are advantages to both sides of the equation. If you’re looking to build your own custom-made home to stay in for a long time, then it seems to be worth it to build your own home. Otherwise, it is more sound to buy a move-in ready home in order to cut down on costs.