New Construction
Explore how buying new construction works in Canadian real estate, including timelines, warranty coverage, and key legal and financial considerations.
May 22, 2025
What is New Construction?
New construction refers to properties that are recently built or in the process of being built, typically offered by developers or homebuilders before or just after completion.
Why New Construction Matters in Real Estate
In Canadian real estate, buying new construction can offer customization options, modern layouts, and energy-efficient features. It also involves unique financial and legal considerations compared to resale properties.
Key characteristics include:
- Purchase via builder or developer contract
- Pre-construction or quick possession availability
- GST/HST applicability on new homes
- Coverage under provincial home warranty programs (e.g., Tarion in Ontario)
Example of New Construction
A buyer purchases a new construction townhouse with an estimated occupancy in 18 months and selects finishes like cabinetry and flooring upgrades during the design phase.
Key Takeaways
- Involves purchase of newly built homes.
- Requires staged payments and longer timelines.
- Includes warranties and GST/HST.
- Legal review of contracts is essential.
- Buyers often choose design features.
Related Terms
- Builder Compliance
- Tarion Warranty
- Interim Occupancy
- Deposit Structure
- Agreement of Purchase and Sale
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
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)