Construction Cost Per Square Foot

Construction cost per square foot is the first place to start when you’re figuring out your construction costs.  It provides an easy way to do a quick calculation based on the square footage you intend to build and of course, the construction cost per square foot.

construction cost per square foot

Naturally all the principles discussed here apply if you’re using meters per square foot.
Cost = square footage x cost per square foot (or does it?).

Let’s get the ball rolling with a few definitions....

Definitions for construction cost per square foot

Definition of cost

When we’re talking about construction cost per square foot, we’re talking about the cost to build your home – the construction cost, sometimes referred to as the hard cost.  Your construction cost includes the labor and materials to build your home plus your builder’s overhead and profit.

Your project will include lots of other costs like buying your land, architecture fees, engineering fees, permit fees etc.  These costs are sometimes referred to as soft costs.

Definition of square footage

Since we’re talking about construction cost per square foot we need to know what spaces of a home are included.

Usually, a cost per square foot is based on gross floor area (GFA) which includes all covered internal spaces including basements with at least 7.5ft headroom and excluding non-enclosed areas, such as exterior covered walkways and porches.
Measurements are taken from the outside of exterior walls and to the centerline of party walls.

Always find out what types of areas are included in any cost per square foot that you use in your construction calculations.  If you’re making comparisons between quotes, make sure that the square footage basis is the same (or you figure out a way to adjust for any differences).

Now that we’ve got those definitions out of the way, here are a few more important things to know about construction cost per square foot.

General factors that influence construction cost per square foot

Have a read about home construction cost which discusses the main drivers of project cost.

understand construction cost per square foot

How cost intensive is each space?


Not every room in the home is equally cost intensive. Rooms like your kitchen and bathroom will be more expensive per square foot (about 5 times more expensive) than living or bedroom space because they contain more fixtures and fittings such as appliances and cabinets and counter tops and washbasins, showers and toilets.

HOWEVER, at high level estimate stage a cost per square foot for the whole house is sufficient. The size of the kitchen and bathrooms are generally in proportion over the overall size of the house after all.

As homes get larger, the number of bedrooms tends to increase.  While it’s also true that the kitchen may get larger and there may be more bathrooms, larger homes tend to have a slightly lower construction cost per square foot because of the increased proportion of bedroom space.

Two story homes cost less per square foot than for the same size one story home because there is only half the amount of roof being built.

How accurate is your construction cost per square foot figure?

The accuracy of a cost per square foot is only as good as the source of the information.

It’s important that the cost per square foot that you use is relevant to your project and takes into account current market prices.

Sources for construction cost per square foot information

The best source of information for this is a builder that has recently completed a project similar to yours.

Remember that a volume builder creating the same house with a narrow selection of finishes is going to have a lower price per square foot than a custom builder. Which is more similar to your project?

A cost estimator is also a good source of cost information.  Cost estimators may have dealt with recent projects and will also have access to up-to-date cost databases.

More construction costs...

You might like these pages.