Do higher home prices translate into higher profit for the construction companies?
I’ve been always curious what does a builder make from selling a new home. There must be lots of variables here like location, the size of the home, the price of materials and labor… and most importantly the price of the land.
There is no much information on this topic on the web, though. Why? Perhaps the builders are a shy bunch and don’t like to brag about their profit. Perhaps there is other reason – builders don’t want you to know. One fact is undisputed, however – walking through a neighbourhood with custom build homes in Ottawa one can see lots of tracks parked in the driveways. They don’t belong to a contractor called to fix the pluming – the track owner is also the house owner.
So, what do you think is the builder making from selling new homes? 5%, 10%, 30%, 50%, or more?