Hard Costs
Learn about hard costs in Canadian construction — what they include, why they matter, and their role in project budgeting.
July 29, 2025
What are Hard Costs?
Hard costs in construction are the direct, tangible costs of physically building a project, such as materials, labour, and equipment.
Why Hard Costs Matter in Real Estate
In Canadian real estate development, accurately estimating hard costs is essential for budgeting and securing financing.
Examples of hard costs:
- Building materials (e.g., concrete, steel, lumber)
- Contractor and subcontractor labour
- On-site equipment and machinery
Understanding hard costs helps developers and lenders assess project feasibility and manage construction budgets.
Example of Hard Costs in Action
The developer’s hard costs included all materials and subcontractor expenses required to build the condominium tower.
Key Takeaways
- Direct costs of building a project
- Includes materials, labour, and equipment
- Excludes administrative and financing costs
- Crucial for budgeting and financing
- Impacts overall project profitability
Related Terms
- Soft Costs (Construction)
- Construction Loan
- Budgeting
- Holdback (Construction Financing)
- Draw Schedule
An overview of the ICE District in downtown Edmonton and the Connect Centre. / Avison Young, TD Cornerstone
The cancelled 16-storey office building (left) and an illustration of the current development potential (right). / Avison Young, TD Cornerstone
Rennie is launching a new commercial real estate brokerage called rennie Commercial. / Rennie
International Plaza at 1959-1999 Marine Drive in North Vancouver. / Nch’ḵay̓