Is it cheaper to build UP or OUT?

Everyone who plans to build a new home has a budget. Regardless of the size of that budget, everyone wants to get as much house for their dollar as they possibly can. Along that line of thought, one of the most common beliefs that we hear from potential customers is “it’s cheaper to build up a storey than it is to build out like a bungalow”.

So, is it true?

Yes, this can be true, provided that the overall square footage of the build-up ends up being close to the same square footage of the build-out option. Building costs tend to vary by finished living area, so whether it’s on a second level or main floor doesn’t make too much of an impact on overall costs.

As a result of this, building up can often end up being much more costly than building out. This is because people typically require more square footage in their main living area for day to day living than they do for bedroom space. For example, a family of three would probably thoroughly enjoy a 1,200 sq ft one level layout that would give them adequate living space, whereas they would likely struggle to live in a house with 600 sq ft on each floor of a two-story house.

There are of course exceptions to every rule, but building up rather than building out usually requires more overall square footage in the home, and ultimately higher building costs.