Carrying Costs
Learn about carrying costs in Canadian real estate — what they are, why they matter, and how they impact investment returns.
August 07, 2025
What are Carrying Costs?
Carrying costs, also known as holding costs, are the ongoing expenses incurred by property owners while holding real estate before it is sold, leased, or redeveloped.
Why Carrying Costs Matter in Real Estate
In Canadian real estate, carrying costs impact profitability and cash flow, especially for investors and developers.
Common carrying costs include:
Understanding carrying costs helps owners evaluate investment feasibility and plan exit strategies.
Example of Carrying Costs in Action
The developer factored carrying costs like property taxes and insurance into the project's overall budget.
Key Takeaways
- Recurring expenses while holding a property
- Includes taxes, mortgage, and maintenance costs
- Affects cash flow and project profitability
- Important for investors and developers
- Helps determine holding period feasibility
Related Terms
- Operating Costs
- Capital Reserve
- Vacancy Rate
- Budgeting
- Carrying Capacity
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)
