If you’ve been going to showhomes and open houses, you may feel overwhelmed in making the big decision: should I buy an older home or build a new home?

Deciding between an older home and a new build can be difficult when buying a home. First, we recommend discussing your dream home with your family to make the best decision possible. After you’ve discussed that and other pros and cons, it’s time to look at price points and the value of each home type.

So how much does a custom home cost? And how much does it cost to build vs. buy in Calgary?

This article will go deeper than mortgage rates and property taxes and provide you with average purchase prices and easily forgotten costs. Let’s dive into which home type works best for your budget and lifestyle.

The Cost of Building a Custom Home in Calgary

The prices of custom homes can completely change depending on various factors, including location, market value, customizations, upgrades, and more. Besides your upfront costs like your down payment, traditional mortgage, insurance, interest rates, and property taxes, here are extra costs that you may need to consider when building a custom home.

Materials and Fittings

Showhomes typically showcase both standard fittings and some potential upgrades. If there are specific upgrades you want to include when building your new home, you’ll need to budget for these. 

Soft Costs

When considering a custom home build in Calgary, there may be other soft costs you need to factor in that could significantly affect your overall budget. An example of this is landscaping. It’s best to confirm whether these costs are included in your home build contract.

Energy-Efficiency

New homes are more energy-efficient than older homes for several reasons. New homes are built with double-pane windows rather than single-pane, which can significantly decrease utility costs. Other factors that make new custom home builds more energy-efficient include using advanced insulation technology, more energy-efficient appliances and lighting, and more advanced and efficient HVAC systems.

Land Prices

When you purchase a newly built home in Calgary, you will notice the varying costs in properties based on their lot size or shape. In a welcome centre, an area manager or sales team can present all the lots available and price points. On average, homes in corner lots (pie-shaped) or larger lots will cost more than the other lots.

The Cost of Buying a Home in Calgary

Depending on your needs, buying an older home can also be an excellent option. The average total cost of buying an existing home in Calgary is $583,000. There are a few additional expenses to consider when purchasing an older home. For example:

Home Inspection Fee

When purchasing an older home, we recommend you get a home inspection. This inspection process will highlight potential issues in the house. These fees can cost anywhere from $300-$550+ for complete home inspections.

Renovation or Upgrade Costs

Unlike a new build tailored to your specifications from the outset, an existing home may not perfectly align with your desired preferences and standards. Whether it’s updating an outdated kitchen, transforming a bathroom, or enhancing energy efficiency with new windows and insulation, renovations can significantly increase the overall cost of buying a home in Calgary.

Maintenance

The maintenance costs on existing homes can cost you more than anticipated. Some experts suggest saving between 3-5% of your home’s cost, or about $24,000 annually to pay for maintenance. If that seems high, it is. It factors in major repairs, which may be necessary for older homes. Just like any secondhand purchase, buying a home that has had previous owners comes with an inherent risk. Was maintenance done correctly over the years? Were upgrades or repairs done professionally? Some older homes may have been improved over time by fussy owners, whereas some have been neglected beneath the surface level. 

Roofing

With a variety of maintenance and major repairs that occur in an existing home, you can’t forget about the roof! Calgary and Edmonton snowfall and hailstorms can decrease the life span of roofs significantly. The average home needs a new roof every 15-25 years. Depending on how old the home is, you may need to consider this sooner rather than later. According to Sunik Roofing, new roofs can cost between $5,400-$9,000 for asphalt shingles, $7,858-$14,412 for metal shingles, $12,000-$16,000 for wood and cedar, or $22,200-$37,000 for a slate roof.

Additional Factors that Affect Both Home Building and Buying Costs in Calgary

There are many factors to consider when purchasing a custom house or an existing home that affect the overall cost. The following are additional costs that you might want to think about.

Investment Journey

Buying a new home is one of the most significant investments that new home buyers ever make. Generally, all homes go up in value over time, and this is commonly evaluated with the terms: appreciate and depreciate. Appreciation refers to an increase in home value over time, whereas depreciation refers to a home’s decreasing value over time. These values often fluctuate, depending on the current home market. In Calgary, a lack of real estate inventory can cause the prices of existing homes to increase, meaning buyers have less selection to choose from and higher prices than typical. New communities are less impacted by this trend, as they offer more inventory due to the creation of new lots by a developer. Building or buying in one of Calgary’s new communities means you have the choice of location, home style, and finishes, and better home prices.

In an older home, you will have access to how the market has affected home value over time. You are taking more investment risk in a new home because there is no viable information on the home’s historical value. On the other hand, as the community that your new house is in grows and develops, your home will likely begin appreciating.

Location

The choice between building a custom home and buying an existing home in Calgary is also influenced by location. In densely populated or established areas of Calgary, buying an existing home might be more feasible due to limited land availability. But, in emerging neighbourhoods or less developed areas, building a home offers the opportunity for customization and potentially greater value, allowing you to select the ideal spot that aligns with your personal and lifestyle preferences. 

The location can also affect costs, with established neighbourhoods often carrying a premium on existing homes, while new constructions in developing areas may offer better investment prospects as new communities become established over time. 

Driveways

At times, new build owners want to upgrade their driveway to aggregate instead of standard concrete slabs, or existing home buyers want to re-do their driveway due to long-term use. These additional costs can be forgotten about, and they are not cheap! Driveway costs range from $600 to $18,000, depending on the materials and type of driveway you like.

Air Conditioning

Frequently, new homeowners like to have HVAC units installed in their homes before moving in. The luxury of air conditioning can be added to a new home build or an existing home. If you are looking for HVAC in your new home, consider that air conditioning can cost anywhere from $3200–$6000 to install. If an existing home has air conditioning already installed, consider the age and condition of the unit, and be sure to ask questions about this during an inspection so you aren’t taking on an immediate repair bill. 

The Most Cost-Effective Solution

To answer the big question, “is it cheaper to build a house or buy one?” well, it depends. The cost to build a house in Calgary or buy one may come at similar price points, but they can also come with alternative costs. Evaluating which home works best for you, is completely dependent on your lifestyle and what you value in a home. For example, if you value convenience, you may be sold on a new build.

If you’re still looking for more information on the differences between older homes and new construction homes, check out our blog post: Buying an Old House vs. Buying a New House: The Pros & Cons You Should Consider.

Get the Best Bang for Your Buck with Shane Homes

Have you made your decision yet? After weighing the costs between the two homes, you may notice that an existing home has more additional costs that new homes do not.

If you value convenience, saving money, and custom home solutions, buying a new home may be the perfect fit for you and your family. Discover exactly what you love in a house with the Shane Homes Build and Price tool. This tool allows you to browse various home types, so you can become one step closer to purchasing your own house and building your dream home.

Shane Homes offers a variety of duplexes, townhomes, condominiums, and single-family homes that you can choose from and customize. Start your homebuilding process with Shane Homes, Calgary’s favourite custom home builder. Contact us and start building your dream home today!