Building Condition Update · Builder Launch

Building Condition Update

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!

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