02-28-2017, 12:24 PM
OK, so I went to look, and found two studies here, average construction costs US$19K and US$24K:
http://www.vtpi.org/tca/tca0504.pdf
More relevant are the Canadian costs, though. Altus Group projects a range of C$65 to C$95 per square foot, or C$22K to C$32K. I expect Kitchener numbers will be closer to the low end, whereas Toronto or Vancouver will be at the high end.
http://www.altusgroup.com/media/1160/cos...14_web.pdf
So it's not too far from your cost numbers. But I don't know where you get a 30-45% margin assumption. I doubt that most developers would be making more than 10-20% on a condo project today. And in any case, even at cost, there is no "subsidy": building extra spaces at $25K each and selling them at the same price neither increases or decreases the developer's profit.
http://www.vtpi.org/tca/tca0504.pdf
More relevant are the Canadian costs, though. Altus Group projects a range of C$65 to C$95 per square foot, or C$22K to C$32K. I expect Kitchener numbers will be closer to the low end, whereas Toronto or Vancouver will be at the high end.
http://www.altusgroup.com/media/1160/cos...14_web.pdf
So it's not too far from your cost numbers. But I don't know where you get a 30-45% margin assumption. I doubt that most developers would be making more than 10-20% on a condo project today. And in any case, even at cost, there is no "subsidy": building extra spaces at $25K each and selling them at the same price neither increases or decreases the developer's profit.