Local builders and residents are feeling the pinch of high material costs, but housing demand is keeping business steady.
The cost of lumber and construction materials have skyrocketed in recent months, part of an upward trend throughout the COVID-19 pandemic. A common 2 x 4 western spruce-pine-fir is at $1,330 (USD) per thousand board feet as of April 23 – nearly twice the 52-week average of $773.
Haliburton County Home Builders Association (HCHBA) vice-president Glenn Evans said those costs can hurt contractors when they lock in project prices months in advance.
“These volatile price increases, it’s difficult to maneuver that when you’re already locked into a price,” Evans said. “It’s impacted the construction industry, I would say right across the board. Doesn’t matter who you are, how you operate. It’s having a negative impact.”
But builders remain busy thanks to a booming real estate market, which Evans said often goes together with the construction sector. Real estate company Royal LePage said March 23 after a 16 per cent increase in home prices in Canada’s recreational property regions in 2020, it projects another 15 per cent increase in 2021.
“Life during the pandemic has made cottage country and country living more desirable than ever,” Royal LePage president and CEO Phil Soper said. “Canadians young and old [are looking for] properties with more space, easy access to nature, and the ability to achieve that everelusive work-life balance.”
“It’s a little bewildering that the price of materials hasn’t seemed to slow down the demand yet, but that’s the reality,” Evans said. “People are still seeking to leave the city.”
That has made it a “very positive market” for builders, Evans said. With properties up for sale drying up, he said people are turning to vacant lots or teardowns to build the new home they are looking for.
Although the pandemic’s end could be coming, Evans said he does not foresee prices falling anytime soon. He said there are other factors to the price increases, such as large forest fires.
“I’m not convinced you’re going to go back to a pre-pandemic kind of price,” he said. “They will recede to a degree, but I’m not convinced you’re going to see prices plummet.”
Although companies might be able to bear the increases, he said the “do-it-yourself” projects are the ones that will take a hit.
“To build a little deck that used to be $700 or $800 for materials pre-pandemic is now $2,000,” Evans said. “That really takes you back when you experience that.”