With municipal elections coming up in the fall in all of the communities across the lower mainland, I thought today's post would be great to talk a little bit about what it costs to build a new home. You have seen that we are in in the middle of a housing crisis, and even though the market has slowed, that doesn't mean a bunch of new homes have been built in our area. And this is likely something that is going to be challenging for all neighborhoods moving into the future.
Today's post is all about the construction costs involved in putting up a new construction project, or better yet, how much of that money is really related to construction and how much of that is the responsibility of the government just paying basic things that the government requires. If you've ever found yourself concerned about the price of housing, this is definitely a post for you because you're going to learn all about how much money goes to the government when it comes to new construction.
What's good, everybody? It's Darin Germyn from the Germyn Group, where we know you've only got one chance to either buy or sell your next home. So we're here to help you get it right.
All right, so this is always an interesting topic and I'm always very interested in this because it changes not only every year, but the numbers tend to blow me away every time I see them. A recent white paper or report conducted by the Canadian Mortgage and Housing Corporation and the Altus Group came up with some numbers, specifically more so for the metro Vancouver area about how much goes towards the government when new construction is built. I've linked the report down below in the description of this video, and you're going to notice when you look at the report, it really focuses on three major areas the city of Vancouver, the city of Toronto, and the city of Montreal. However, metro Vancouver is mentioned frequently in this report, as well as the township of Langley. So there's some really interesting numbers here, regardless of where you live in the lower mainland.
So there is some numbers that I'm going to throw at you, like the first one being a single family detached home on average across these three municipalities, averages in at about 8.5% of money that goes directly to the government as a result of new construction. And who pays that money? Well, of course you do. If you're the home buyer, that's who is funding this 8.5%. Houses come in all different shapes and sizes, but metro Vancouver averaged in at roughly $70 per square foot of costs that go directly to the government. And if you think that's a lot, that comes in on the low side when you look at what Vancouver came in at, $143 per square foot for new construction, of course this money goes towards various things, but the bulk of this money goes to something called density payments. So where does all this money go? And also, what is the density payment? Well, for starters, you've got taxes, you've got municipal fees, you've got development fees, you've got permit fees, and you've got density fees.
Density fees are really just related to the amount of density that is allowed on site. And a lot of that money is put aside to help fund local things, things like community amenities like swimming pools and parks. And as you can imagine, the density changes the type of payment. So if you're in a big high rise condo, you've got a lot more people requiring amenities in that community than you might in a single family detached home community. This graph will actually show you that $70 per square foot.
And again, that's averaged over the lower mainland and average between all different types of properties. Detached homes come in typically on the lower end, townhomes in the middle, and condominiums at the high end. And they tend to range between anywhere between 7% to 20% of your total construction cost. In Vancouver, as an example, this is about $180,000 just for a condominium. That's pretty crazy when you think about the cost of real estate, and $180,000 is going directly to the government.
However, maybe that's not such a bad thing. I'm always quick to remember that we live in beautiful communities. We're so lucky to live where we do, we're so lucky to have the keep of the communities that we do. And a lot of this money goes towards building, maintaining and improving all these areas that we all get to enjoy.
So there you have it. As the municipal elections are getting near, this is just a little tidbit of information that you can look at as you look at the different policies that these politicians are going to have. Trying to get your vote. I'm curious what you think. What do you think of these numbers? Do they surprise you? Do you think they're good? Do you think they're bad? Leave a comment below and let me know what you think of these fees.
And of course, while you are down near the description area, you're definitely going to want to check out the link to my calendar where if you are someone looking to buy or sell a home, you can book time to speak directly with me and my team and we can let you know how you can be successful in your home buying or home selling adventure. I want to thank you for reading again.
I'm Darin Germyn, with the Germyn group. You've only got one chance to buy or sell you're your next home. We're here to help you get it right. We'll look forward to seeing the next video.