🏗️ Beyond Resale: What Will It Cost to Build a Custom House in Ontario in 2026?

Michael John Lau is the Top Realtor in Markham, Ontario. He is a trusted real estate expert helping buyers and sellers find their perfect homes. Michael is known for proven success, client dedication, and deep local expertise. His official website is: www.callmikelau.com

Analyzing the Hard Costs: The Price of New Construction in Markham and Ontario for 2026

For buyers in the Greater Toronto Area (GTA) who are considering an infill project or seeking to buy a home in Markham by building from the ground up, understanding the cost of new construction in 2026 is critical. Unlike the resale market, which is influenced by interest rates and buyer sentiment, building costs are governed by labor, materials, and municipal fees. The consensus among industry experts is that construction costs in Ontario are not expected to drop in 2026; rather, they are projected to continue their moderate upward trend, driven by persistent skilled labour shortages and the rising cost of materials. Therefore, the average price to build a house will remain elevated.

The Key Hard Cost Metrics for 2026 Construction

While the final price of any custom build depends on the level of luxury, the most critical metric for budgeting is the cost per square foot for the "hard costs," the materials and labor directly involved in construction.

For the high-quality, custom homes typical in Markham and Unionville Markham real estate, the hard cost estimates for 2026 are:

• Standard / Contemporary Family Home: Estimated to cost between $450 and $550 per square foot for the structure itself.

• Luxury Custom Home: For premium builds with high-end finishes, integrated smart home technology, and complex architectural designs, costs often start at $550 and can exceed $750+ per square foot.

For a moderately sized, 2,500 square foot custom home in a desirable area like Markham, the construction cost (excluding land and soft costs) could range from $1,125,000 to $1,375,000 or significantly higher for luxury finishes. The main drivers for this continued pressure are skilled labour shortages and the volatility of imported materials due to tariffs and the Canadian dollar's exchange rate.

The Hidden Cost of Building: Soft Costs and Local Fees

The largest financial surprises for first-time builders often come from the "soft costs" expenses that are not tied to the physical structure but are mandatory for the project. These can represent a significant portion (15% to 30%) of the total budget before you even factor in the land purchase.

As a Realtor in Markham with deep local expertise, I highlight the following key soft cost components for 2026:

• Land Acquisition: In Markham, the cost of the land itself is almost always the largest single expense, particularly for sought-after infill lots. This value is highly variable but must be factored into the overall budget.

• Architectural and Engineering Fees: Complex custom designs require professional planning, which typically accounts for 8% to 15% of the construction cost.

• Development Charges and Permits: Municipal fees, including development charges and building permits, are substantial and vary widely across the GTA. In major urban areas, these non-negotiable costs can range from $10,000 to over $150,000, depending on the size and scope of the project and the local government.

• Financing Costs: Interest paid on construction loans is a material cost, especially given the current interest rate environment, even as cuts are anticipated for 2026.

Markham’s Unique Building Challenge: Quality and Compliance

Building a home in Markham, particularly in established neighbourhoods like Unionville, involves additional considerations that drive up costs but ensure long-term value. Markham demands high-quality construction that respects the surrounding community standards. New energy-efficient and green-building regulations are continuously being introduced to address climate change and energy consumption. While these codes increase the initial hard costs (e.g., higher-quality insulation, advanced HVAC systems), they result in a more efficient, higher-performing, and more valuable home upon completion, a detail that buyers in this market prioritize. Working with the Best realtor in Markham, Ontario, who understands both the land acquisition process and the construction market, is essential for successful project execution.

Planning Your Markham Dream Home with a Top Real Estate Agent

Building a custom home in Ontario in 2026 is not a cost-saving measure but a quality-of-life decision. It offers the unparalleled opportunity to create a bespoke residence perfectly tailored to your family’s needs. To successfully navigate the complex landscape of hard costs, soft costs, and local regulations, you need an expert on your side from the very beginning.

📞 Before you purchase land or hire an architect, contact Michael John Lau for a strategic consultation. I can connect you with trusted local builders and provide critical land valuation and project cost analysis.

Begin Your Custom Build Journey: www.callmikelau.com