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7 min read

New Buyer Dilemma: To Build or Renovate?

house under construction
house under construction

7 min read

New Buyer Dilemma: To Build or Renovate?

New Buyer Dilemma: To Build or Renovate?

All future homeowners will eventually have to face the dilemma of choosing between renovating an old house or building a new one. Several factors come into play, from cost to ecological footprint, with location and energy efficiency in between. When is renovating the best course of action? When is buying a new house the better of the two? This guide will help you choose the most worthwhile option for your project.

Is renovating or building better?

living room renovation

Buying a house pretty much ensures you'll have a roof over your head as quickly as possible; whereas, building a house translates into lengthy timelines and potential delays, as well as unexpected costs. From purchasing a land parcel to laying the last square tile, there’s a long road ahead and the finishing line is nowhere in sight. However, such a structure will definitely better meet your personal tastes and preferences. 

So, which route to take? Here are all the factors to consider to make a well-informed decision. 

Renovating an Old House Without Losing its Charm

An old house’s charm often lies in its materials. The good news is that a properly done renovation doesn’t automatically mean replacing said charming appeal. For example, applying a resin coating over tiles can mean restoring your flooring to its former glory. The possibilities are practically endless.

In old houses, the kitchen is typically a lot of things but ergonomic isn’t one of them. Note that there are ways to gain space without having to completely remodel the space. One of the ways to do so costs, at most, 30 dollars. Get yourself a wall-mounted utensil organizer with S-shaped hooks. The latter is perfect for hanging mugs, thereby gaining space in your cupboards.

The wall colour in older homes is also extremely important. As such, when repainting, and on top of trying to find the best shade, make sure you choose an anti-microbial paint. Said paint type will prevent mould growth.

Adding synthetic rugs or PVC trim at the bottom of your bathroom walls will allow you to renovate without cramping the home’s existing vibe. 

Building a Custom Home

if your budget allows for it, nothing beats a custom-built home. It allows you to assess the various possibilities yourself, draft the specifics, collaborate with a professional to help guide you along, and consider each constraint. If need be, you can scale back to save money here and there.

Building a custom home means you’re the sole master and commander. You’re the one making all the decisions. Naturally, there are additional costs to doing so, weather-related delays, or other unexpected circumstances, but you’ll still face fewer setbacks by building your house from start to finish. 

Pros and Cons of Both Options

Pros

Cons

Construction

No need for large-scale renovations; compliant with modern construction standards; great insulation; safe (carbon monoxide detector, fireproofing, etc.); home automation; ergonomic rooms; better material; personalized features

Start-up costs; unplanned expenses; higher interest rates on mortgage loans; delivery date; delivery delays; construction-related stress; dirt-filled home

Renovation

Time efficient; budget-friendly

Antiquated construction standards (asbestos, vermiculite, etc.); ineffective insulation; less efficient materials; non-customized property

Environmental Impact: Is Renovating More Worthwhile than Building?

Renovating is a lot less environmentally damaging compared to building a new home. What's at stake here are CO2 emissions caused by the manufacturing process by which new building materials are made. Even LEED and net-zero homes can’t limit their environmental footprint below that of renovations. 

When it comes to renovating structures that are similar to those that should be built, CO2 savings range from 4% to 46%. As such, you need roughly 10 to 80 years for new constructions to offset their higher carbon costs compared to that of renovations. 

Is it cheaper to build or renovate a house?

two people in front of a house under construction

In the next two sections, we’ll cover first the estimated cost of building a new house. Then, we’ll estimate the cost of a full-house renovation while also taking into consideration the best materials available. 

How much does a new construction cost?

It all depends on the construction type and its location. In Quebec, starter homes typically cost $180/sq.ft., whereas a luxury home is valued at $330/sq.ft. Therefore, to gauge whether a new construction or a renovation is more expensive, one has to determine the “where” and the “what.”

The average Canadian home is 1,900 square feet, therefore starter homes are valued at $342,000 and luxury homes at $627,000. Said price tags exclude the cost of the land parcel and any additional payments.

In the next section, we’ll turn our attention to renovation costs based on the most expensive options (heat pump, basement extension, etc.). As a result, we’ll focus on costs associated with high-end, luxury home models.

Let’s take a closer look at the most budget-unfriendly renovation costs. 

Renovation Cost Analysis

We dedicated an entire article—a very detailed one too—to renovation costs. So, let’s take a gander at the highest price tags to better ascertain the cost of moving forward with the best home improvements possible on the home you’re hoping to purchase.

Item

Cost

Heat pump

$15,000

Geothermal system

$50,000

Whole-house humidifier

$4,000

High-end kitchen

$60,000

Electrical system renovation 

$1,500

Whirlpool tub

$8,000

Custom shower

$15,000

Smart toilet

$9,000

Standard bathroom vanity

$3,000

Prefabricated bathroom linen cabinet

$400

Hardwood moulding (x10)

$800

Basement excavation for extension via foundation underpinning

$150,000

Wine cellar

$20,000

Bathroom fan

$500

Water heater installation

$1,400

Toilet and sink replacement

$1,200

Full bathroom plumbing retrofit

$6,000

Central vacuum

$2,000

Wardrobe

$2,000

Total

$349,800

Naturally, to get the best during a renovation, no matter the project, you have to plan your budget accordingly. keep in mind that you don’t have to do everything at once; you can stagger your renovations over a period of time.

How to Save Money on Home Renovations

For large-scale home renovations, you can obtain grants from various programs like Rénoclimat. For example, to have a heat pump installed, you can be granted between $2,000 and $5,000. 

If you qualify as a low-income household, the RénoRégion program can assist you in renovating your home, should you qualify based on the following conditions: 

  • Your home is valued under $100,000

  • Your home renovations cost more than $2,000

  • You reside in a city with a population under 15,000 people or in the Gaspésie-Îles-de-la-Madeleine region

All work is considered eligible, provided that the total payment doesn’t exceed $12,000.

  • Roof

  • Eaves

  • Openings

  • Heating

  • Exterior walls

  • Plumbing

  • Electricity

  • Thermal insulation 

Lastly, note that each municipality offers distinctive grants to help you renovate your property at a low cost.

To Renovate or Build: What Are the Regulations? 

house under construction

Building Permit

A lot of renovation and construction work is subject to a building permit. While the rules change from one municipality to another, the guidelines remain the same. As such, by principle, a building permit is required for all construction, transformation, and extension or addition projects. 

Inquire with your municipal authorities as, based on where your house is located, rules are subject to changes. Therefore, you must comply with the following by-laws: 

  • zoning;

  • construction;

  • those regarding building permit terms and conditions;

  • agreements between municipal work; and

  • depositing plans and other required documents. 

On top of the above-mentioned, approval from your city’s Site Planning and Architectural Integration Program (SPAIP) is mandated, including additional payments (building permit fees, park-related contributions). During the course of renovation work, you will need a building permit to carry out excavation work, to shift a staircase, and, oftentimes, to replace windows and doors. 

The same applies to interior renovations like knocking down walls, thereby changing the house’s original layout. To put your doubts to rest, assume that large-scale projects most often require a building permit (potentially other permits too).

Standards and Restrictions

There are several standards and restrictions, but once again, they rest entirely on your municipality. Why is that, you ask? Every city can choose to adopt a different version of the Building Code's “Building” chapter. As a result, to ensure no mistakes are made and nothing is overlooked, you have two options: 

  • hire a licence-holding contractor (they will know the standards with which to comply); or

  • reach out to your municipal authorities.

Generally speaking, note that in residential areas, such as a downtown area, renovation work is prohibited between 7 p.m. and 7 a.m. Note that you must give a tenant a 24-hour warning if you plan on executing work on a leased property. 

To Build or Renovate: A Priority-Based Decision

If you’re looking for a house that perfectly meets your needs in terms of aesthetics, layout, and energy consumption, building a new house is the best way to go. But, renovating is the most cost-effective and eco-friendly solution. Considering the still sky-high interest rates on loans, the best option is, without a doubt, renovating an old house rather than building a new one. If you’re still on the fence, note that it’s all about one’s ability to manage debt.  


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Last modified 2024-05-22

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