Hi all, Just a brief update on the current state of affairs. Building material and labor costs have outpaced the growth in real estate prices since 2019, especially when accounting for the recent decline in real estate prices in Ontario and BC. Calgary may be an exception here. However, most builders are currently running on very thin margins, if not outright losing money on their builds. As an owner-builder, you essentially benefit from paying yourself as the builder and capturing the market upside of owning land in an appreciating market. When builders are profitable, owner-builders also have limited potential for significant gains. Cities like Peterborough have city councils pushing for 30-50% increases in development charges, effective January 1 this year, to make up for infrastructure budget deficits. This will likely be the final blow to significantly reduce building starts. It is my current view that your time and efforts in building your own property are better reserved for improved market conditions unless you already own the land from a prior time. If your goal is purely to build the home you desire, this may still be a justifiable avenue. However, if your goal is to create an affordable house, unfortunately, the prospects are not good. If your goal is to grow your capital/net worth through real estate, this is not the best avenue for that goal under current conditions. I hope everyone is doing well, and for those who had already started a build when they joined the group, I hope you are finishing strong and have a home you love!

I'm looking at ways to save on cost for some things that are typically done post build, namely having a concrete sidewalk and patio (probably stamped) done at the same time as foundation pour to save having another trip for a concrete pour and labour. Basically I'm looking at economies of scale that may save thousands if done all at the same time. Has anyone every done this? Can this be done or is it best to wait for settlement? Does another permit need to be issued or existing permit amended for this work? Thanks

Words of warning to anyone who has not acquired land yet but is considering this avenue. I have spoken with several owner builders that have had problems with this recently, and even big builders are under pressure seeing banks trying to shrink their access to credit. If you can get a smoking deal on land right now have a long time horizon, it can be worth considering, but otherwise, you should be aware that this is likely the number one hurdle you will face right now outside of the fact that material and labor prices still have not come down enough to make building your own home lucrative at our current resale prices. At this moment, resale prices seem to be falling faster than the construction inputs to build new (material and labor), so the ideal time to build your own home if your goal is to maximize your upside or value for your dollars does not seem to be at this part of the cycle. I hope everyone is well. Take this time to learn and be patient, the time to buy land and build will return. If you already own land, simply GC'ing your own build at this time can still save you money vs paying a turnkey builder, but if you have not committed to this route yet, beware of the current challenges.

Here is another question for someone... I am looking to build a home, a bit out of the norm though, really like the precast concrete look and love the speed it goes up with... I have pricing on the enclosed package, a wide open concrete interior ready for me to do interior finish etc. I don't really want to harass contractors though on stick frame since I am not going that route..... but looking for comparisons. So here is the question -- if I say a finished house is $350 a sq ft -- how would you split finished exterior to interior finishing?? Is exterior half?? More? Less? I realize this is loaded with variables, but high level comparison would be great.

The challenge I've faced with builders who offer an all-in-one package (not build plus model) is that they don't give any flexibility to source or use your own materials. Their argument by these builders is that they get a volume discount and pass it on to the the customer. I haven't found that to be accurate or truthful, especially in this current cycle where prices are coming down on some items (Eg. hardwood, kitchen countertops, cabinets, light fixtures) but their prices are still high. They may be getting a lower volume price but they are just marking it up = no net savings. One of the strategies I'm taking is to postpone payment of some of those materials. If my goal is to self fund or HELOC fund this until we sell our primary residence, the longer I can postpone paying the materials the better. If I can park my gains of my primary residence into a GIC or similar market fund and earn income between the time I sold and got the funds to when the postpone payment expires then those gains (after tax) may pay for some of those finished materials, possibly appliances. For example, if I purchased windows for $100,000. I go with a window supplier who offers a no payments plan for 12 months after delivery and assuming delivery of windows is timed so it's close to the time when window installation is required (eg. 3 months into a build) then, in essence you have $100,000 in hand for 12 months from then. Home is sold at month 10 and moved into new build at month 10. That gives you 5 months to grow that capital gain in a GIC, dividend paying bank stocks or whatever risk profile you want to take. Follow that same approach for hardwood, tiles, vanities, countertops, paint, light fixtures and you could postpone $250K+. Because fewer people are spending on home repairs or even fewer on custom builds the entire construction industry is depressed. The material suppliers are looking at ways to incentivize buyers like discounts and do not pay plans. If you are thinking about how to maximize your cashflow and potentially grow your cashflow post primary home sale taking this type of strategy could help.