The annual Altus Group’s Canadian Cost Guide 2022, tracking hard construction costs across Canada, has been released and it shows a sharp increase in costs in 2021 compared to 2020.

Altus cites a combination of high demand, rising prices for building materials, a persistent labour shortage and broken supply chains for the creation of a “perfect storm of rising costs.”

Consider the challenges the residential construction industry has faced some may consider it a wonder that prices did not rise even higher.

According to the Canadian Cost Guide 2022, total residential spending in 2021 reached $126 billion, up from $114 billion a year earlier.

The costs compared in the guide are hard construction costs, drawn from 1,995 residential project in 2021. The prices are based on the cost per square foot and do not include land costs, soft costs such as marketing and design, landscaping, or financing, legal or municipal fees, which vary widely across Canada.

The Homebuilders Association of Vancouver (HAVAN) released a report January 31 that estimates that local land values account for 38.1% of the average cost of a new Metro Vancouver detached house, which sells for $1.75 million. Municipal fees and taxes make up an average of 10.9%, or $191,400, of a new house price.

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