Is this a textbook example of Adam Smith’s dictum, or are there other factors?
In Vancouver, for example, Altus Group says construction costs for a higher-quality four-storey, wood-frame condo building would peak at $250 per square foot. This compares with $195 per square foot in Toronto and $175 or less in nearly every other city in the country.
The Altus cost estimates are for hard construction costs only and do not include land values, or any of the soft costs, including profit, associated with completing a project. Altus did not provide an explanation why construction costs would vary from one jurisdiction to another.
But the difference is less pronounced in commercial construction:
For example, the hard construction cost for a Class A five-to-30 storey office building in Vancouver ranges from $270 to $340 per square foot. This compares with $220 to $290 per square foot in Calgary and Edmonton. The price for such an office building in Toronto ranges from $210 to $315 per square foot, according to Altus.
It’s no wonder people are having such trouble finding tradesmen for small jobs. We finally found a guy in his 70s to pour a bit of concrete last year.