Deciding when to build a custom home is a major decision. As a leading custom home builder in Vancouver, Burnaby, Coquitlam, and Richmond, Larch Construction is often asked: “Should I build now, or wait for prices to drop?”
While the allure of lower prices is understandable, history and current market trends suggest that waiting for significant construction cost reductions in the Greater Vancouver Area (GVA) is generally not a successful strategy. In this post, we’ll explain why and why starting the planning process now is often the smartest move.
The State of the Vancouver Housing Market in 2025
The Vancouver housing market has always been dynamic, and 2025 is no exception. While it’s impossible to predict the future with absolute certainty, we are seeing some emerging trends:
- Interest Rates: Interest rates rose aggressively in recent years, increasing borrowing costs and impacting affordability. Following these increases, the Bank of Canada began implementing a series of rate cuts in 2024, including some significant reductions, particularly towards the end of the year. While these cuts have provided some relief to borrowers, it’s important to note that rates in 2025 are still higher than the historically low levels seen a few years prior.
- Material Costs: While we saw some materials, like lumber, decrease in price from their peak highs, many building materials and finishes are holding steady or still fluctuating.
- Labour Costs: Labour costs continue to rise across the board, driven by a shortage of skilled trades and increased demand. Additionally, tradespeople themselves are facing increased expenses for necessities like rent, transportation, insurance, and tools, which further contributes to rising labour costs.
- Land Prices: While land prices are a significant factor in the overall cost of a new home project, they are outside the scope of this article, which focuses on construction costs.
- Evolving Municipal Green Standards: We are seeing a significant shift across many municipalities in the GVA towards greener energy options and away from the use of natural gas in new home construction, as detailed in our post on The Future of Home Energy. This shift affects the choice of appliances and mechanical systems for the house. While designed for long-term energy savings, these greener solutions typically involve a higher initial investment during construction.
Why Waiting for Construction Prices to Drop is Likely a Losing Strategy
In the Vancouver market, hoping for substantial drops in construction costs is often wishful thinking. Several factors contribute to a consistently strong demand for new homes, keeping prices relatively stable or on an upward trend:
- Historically Upward Trend: Construction costs, particularly in high-demand areas like Vancouver, tend to trend upwards over time. While there can be short-term fluctuations, significant and sustained price drops are rare.
- Strong Demand: The GVA continues to experience strong population growth and demand for housing. Furthermore, the BC provincial government’s mandate allowing multiplexes in many areas previously restricted to single-family homes is expected to further increase demand for construction services. Municipalities saw a large influx of development applications for multiplexes in 2024, with even more anticipated to follow this initial wave. This will likely put upward pressure on both material and labour costs.
- Labour Shortages: The ongoing shortage of skilled tradespeople shows no signs of abating, contributing to rising labour costs.
- Supply Chain Issues: While the situation has improved, supply chain disruptions can still impact the availability and cost of certain materials, particularly specialized items. For example, items like garage doors can have lead times of 6 weeks or more.
- Inflationary Pressures: General inflation affects the cost of goods and services, including those related to construction.
The Advantages of Starting Your Custom Home Project Now
While there are many factors to consider, here are some key advantages of beginning your custom home project sooner rather than later:
- Start Enjoying Your Dream Home Sooner: Why postpone the lifestyle and comfort of your new custom built home?
- Interest Rates: While rates are higher than a few years ago, the recent cuts by the Bank of Canada have made financing more accessible. Locking in a rate now can also provide some certainty.
- Avoid Potential Cost Escalation: Waiting could mean paying significantly more for the same house in the future due to rising labour and material costs.
- Secure Your Team: The best tradespeople and builders are often in high demand. Starting now increases your chances of securing your preferred team for your project.
The Larch Construction Advantage: Planning for Success
At Larch Construction, we understand that building a custom home is a significant investment. Our proven 6-step process for custom home construction is designed to provide a smooth, transparent, and stress-free experience from start to finish.
Our unique fixed management fee model provides cost certainty, unlike the percentage-based fees commonly used in the industry. This allows us to focus on your best interests without any conflict of interest. We are also proud members of HAVAN (Homebuilders Association Vancouver), a Baeumler Approved builder, and maintain an A+ rating with the Better Business Bureau, demonstrating our commitment to quality and ethical practices.
Don’t Let Market Uncertainty Delay Your Dream Home
While market conditions are a factor, they shouldn’t paralyze your decision-making process. Trying to time the market perfectly is often a futile exercise. By starting the planning process now, you’re taking control of your timeline and ensuring your vision is realized without unnecessary delays or compromises.
Let’s Discuss Your Building Plans
Contact Larch Construction today for a free consultation. We’ll be happy to discuss your project, answer your questions, and explain why starting now might be the smartest move. We’re committed to helping you build a high-quality custom home in Vancouver that you’ll love for years to come. Explore our projects for inspiration and to see examples of our work.
