Starting a new life in Victoria BC means you’ll have to navigate a series of life-changing decisions. One such choice you’ll face is whether to build a custom home from scratch or renovate an existing one.
Both options can be attractive, depending on a variety of factors such as your family size, financial position, and lifestyle. However, there’s one factor that stands above all others, according to Tim Agar, a senior project manager with Horizon Pacific Contracting.
“The number one reason people choose to renovate over tearing a house down is the existing house is legally non-conforming. This means the house met the requirements at the time it was built but doesn’t meet the current bylaws. It’s a legal structure, but anything new would have to meet the current rules,” says Agar. “A new house might need to be smaller, farther from the edge of the property or set further back from the beach. Renovating the house instead of rebuilding means those desirable features can be retained.”
This article will go through in detail some of the main things you’ll be faced with when trying to decide whether to build or remodel.
Market Considerations for Victoria, BC
The first thing you’ll want to take into consideration is the housing market in which you plan to buy, build or renovate in. Location is a big piece of that.
Location, Location, Location
If you’re targeting Greater Victoria BC, there are plenty of factors on your side regardless of which decision you’re leaning towards. The real estate market in Victoria is strong, and has been so for years thanks to its mild weather, beautiful surroundings with ocean on both sides, high quality of life, safety, and easy access to outdoor adventure. On top of that, there is an abundance of good jobs in government, tech, and construction/trades. Because of all this, there remains a constant influx of lifestyle seekers moving to Victoria, helping to make the real estate market one of the most expensive in the entire country. Halfway through 2024, the average condominium went for $567,900, while single family homes fetched an average of $1,295,500.
While Victoria is certainly home to a strong housing market, demand for other cities and towns on Vancouver Island will vary. In some high competition areas, for instance, it might make more sense to snap up new listings as soon as possible, while in others it might be better to take more time. Once you’ve decided on your desired location, take a deep dive and explore the pros and cons of that community.
Housing Market Conditions in Victoria, BC
This new build overlooking Cadboro Bay replaced an older house. See more of this Oceanside Oasis custom home project.
Aside from the location you’d like to buy in, it’s worth considering the actual buying and selling conditions in that market. At the end of June 2024, there were 3,460 active listings for sale in Victoria, which is 47% more than the 2,342 active listings available during the same time in 2023. The market has stabilized after a slightly rocky 2023, plus the flattened numbers regarding sales and prices indicate calm waters ahead.
Cost of Building in Victoria, BC
For many, the key deciding factor when it comes to buying and renovating versus custom building a home will be the price tag. There are a lot of cost-based factors to consider, and in a highly desirable market like the South Island, prices can get steep real quick.
Which Costs More?
To start, it’s fairly safe to assume that nine times out of ten it’s going to cost you more in total to custom build an entire home than buying and renovating an existing one. There are a few reasons for this, but the most obvious one is your ability to personalize your space as you see fit. The blank canvas allows you to run free. But building a new home also means you can benefit from your builder’s new home warranty — an option that isn’t available when you renovate. That means more peace of mind and better construction defect insurance.
It’s also worth considering the other costs that come with buying and selling a home, from real estate agent commissions to legal fees, transfer tax, mortgage penalties, and moving fees.
Renovation Decisions
This kitchen was part of an extensive heritage restoration. View the Stanley Ave Heritage Renovation project.
While renovating an existing home might seem to be a cheaper alternative to building new, there are many risks to consider. If you don’t know what you’re doing and have failed to consult with a professional renovation contractor, you can easily get into budget trouble. Without proper planning, you could also make questionable renovation decisions that don’t give you a good return on your investment. If reselling is your top priority, honing in on the kitchen, bathrooms, and exterior can give you the most bang for your buck when renovating. However, there are limitations.
“While price tag to renovate might be lower, the cost per square foot of a renovation is higher than building new and you rarely get as good a result as you are handicapped by the pre-existing design and architecture,” says Agar. “The home valuation component is also important to consider. A 1950’s house will always be that, even if the home is completed gutted. From an investment perspective, it’s often better to replace the home.”
Financing
Assuming you won’t be paying for your entire project in cash, another factor to consider that could affect your bottom line is the financing that’s available. As a general rule, securing a loan for a custom-built home will be more challenging than getting one for an existing home. That’s because the bank will have to assume more risk if the construction process doesn’t go according to plan. In that case, you may need to fork over 25%+ down to secure the loan. By going with a reputable custom home builder, your lender will be put at ease and be more willing to work with you when it comes to financing.
Timing & Family Planning
Time is another important factor to consider when planning a new home build or renovation. A little anxiety is normal, but you certainly don’t want to feel rushed throughout the process from start to finish.
Build Time
After their children moved out, a couple downsized and updated this townhome. See the Mid Century Renovation project.
The time it takes to complete your project, whether building or renovating, is known as build time. Because of the level of customization and scale of the project, custom home builds will surely take longer than typical renovations (most custom builds take between 12 and 18 months, while renovations average under a year). So if you’re in a rush to move into your new home, a custom home build may not be the best option. If that’s the case, you might be better off renovating your home and completing the process at your own pace.
Asset Planning
Building or renovating a home is a major financial decision. Your household savings will certainly have a say in which decision you make. But if money isn’t as tight right now, it may be worth considering the investment opportunity of buying and renovating vs. building new. Renovating will certainly be less total cost, giving you the ability to still design and build your dream kitchen, closet, and backyard. But the home value increase down the road just can’t stack up to that of a custom build. While definitely not guaranteed, a custom home built with the best materials and energy efficiency standards in your favorite neighbourhood will appreciate more.
Family Growth
Another important part of the planning process that needs to happen before any designs are drawn is your family plans. Who will be living in this newly built or renovated home? Are kids in the future? Are older relatives moving in? Will it make more sense to spend $200,000 or more on a home addition, or sell and build your own home? These are the kinds of considerations that need to be made. You certainly can’t plan for everything, but as a family, take some time to look as far down the road as you can and try to determine what your future living situation could look like. That insight will be valuable when it comes to designing your forever home.
Customization Choices
Perhaps the most exciting aspect of renovating or starting from scratch with a new home build is the range of choices at your fingertips. With the help of your builder, this is your chance to make your house dreams come true.
Building a custom home will understandably allow you more freedom when it comes to designing and building. You’ve still got plenty of freedom when renovating, but there are limitations.
Neighbourhood
The neighbourhood in which you choose to build will have a big impact on your lifestyle. Here is your chance to not only improve the quality of life for your family, shorten your commute and instill some peace of mind, but dramatically increase the value of your new home down the road. You kids will also get the opportunity to attend desirable schools, and walk to parks, beaches, or great restaurants. Whether you’re buying or building, the neighbourhood is an important consideration that should not be overlooked.
Brand New vs. Mostly New
This next consideration comes down to your stylistic preference. When you build a custom home from scratch, you can be sure everything installed will be brand new, from the appliances to the flooring, walls, lighting, plumbing and electrical setups.
When you choose to renovate an existing property, you’ll certainly be able to make decisions to install new materials and appliances, but it will be harder to change the major features of the structure. If you start from scratch with a kitchen renovation, for instance, the cost to do so may include hidden elements like beams and asbestos abatement that explode your budget. Building a custom home from scratch gives you the ability to make 100% of the design choices all at once.
Environmental Standards
Luxury mixes with efficiency in this LEED Platinum residential home. See the Prospect Lake custom home project.
An overlooked factor in the buying vs. building arguments is being up to current seismic, energy efficiency, and environmental standards. When you build a custom home from scratch, you can be sure that your home not only meets the highest building standards, but also saves on your operational costs. With the help of your custom home builder, they’ll work with you to make your home as environmentally-friendly as possible, which will then help you generate lower energy costs down the road, lower your carbon footprint, and improve the air quality in your home.
If you choose to renovate an existing home, depending on the original construction date, the home will not be up to the same standards throughout. For instance, hot water tanks may not be up to the same environmental standards, and the HVAC systems may be less efficient. Plus, you may have to deal with old wiring, lead paint, or mold. However, if you do a complete tear down renovation to the studs, all of these issues go away.
Whether you’re leaning towards renovating or building new in Victoria BC, Horizon Pacific Contracting is one of the best local builders to help you navigate the options. They’ve been custom building and renovating finely crafted homes here on the South island for more than three decades. Contact them today to get started on your dream project.
