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Hard Costs

Learn about hard costs in Canadian construction — what they include, why they matter, and their role in project budgeting.

Hard Costs

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

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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