{"id":22250,"date":"2023-07-25T15:15:00","date_gmt":"2023-07-25T22:15:00","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=22250"},"modified":"2023-07-25T09:32:59","modified_gmt":"2023-07-25T16:32:59","slug":"the-cost-of-building-a-home-in-canada-has-never-been-higher","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2023\/07\/the-cost-of-building-a-home-in-canada-has-never-been-higher\/","title":{"rendered":"The Cost of Building A Home in Canada \u2026.. Has Never Been Higher"},"content":{"rendered":"<p style=\"text-align: justify;\">Surging construction costs in Canada are putting new pressure on home prices, worsening a severe affordability crunch, according to the nation\u2019s largest lender.<\/p>\n<p style=\"text-align: justify;\">A gauge of residential construction prices has risen 51% since the first quarter of 2020, outpacing the 13% gain for the consumer price index, Royal Bank of Canada economists said in a report published Wednesday.<\/p>\n<p style=\"text-align: justify;\">\u201cThe cost of building a home in Canada \u2014 or any structure for that matter \u2014 has never been higher,\u201d the economists said in the report, citing \u201cdramatic jumps\u201d in concrete and structural steel prices since the start of the pandemic along with soaring lumber prices in 2021 and early 2022.<\/p>\n<p style=\"text-align: justify;\">The increase in building costs comes as Canada grapples with high home prices and rents, an immigration-driven population boom, and shortages of workers and raw materials \u2014 all of which are adding to homebuying challenges.<\/p>\n<p style=\"text-align: justify;\">The elevated costs have contributed to a decline in new home construction in the past two quarters. That\u2019s a problem because population growth is accelerating.<\/p>\n<p style=\"text-align: justify;\">Labour costs have soared during a period of high job vacancy rates within the building industry, according to RBC economists. Wage growth in construction was 9.4% last year, more than double the pace of other industries, they said.<\/p>\n<p style=\"text-align: justify;\">\u201cInflation could be tamed by increasing the supply of skilled workers,\u201d the report\u2019s co-author, Rachel Battaglia, said in an interview. She suggested Canada lean on a federal government program designed to attract skilled immigrants to ease the construction industry\u2019s labor shortages.<\/p>\n<p style=\"text-align: justify;\">Extreme weather has also hurt availability of critical building materials, driving up prices. Heavy rains, flooding and wildfires have constrained lumber supply while temporary shutdowns of cement plants in Ontario, BC and Alberta have hindered production, according to the economists.<\/p>\n<p style=\"text-align: justify;\">\u201cIn the near-term, a lull in homebuilding and the resolution of production issues at cement plants are likely to ease pressures to some degree,\u201d the report said. \u201cWe expect housing starts to dip 10 per cent this year across Canada, which should temporarily soften demand for materials.\u201d<\/p>\n<p style=\"text-align: justify;\">Such relief may be short-lived.<\/p>\n<p style=\"text-align: justify;\">\u201cSignificantly ramping up homebuilding over the medium to longer term will keep costs elevated,\u201d the economists said.<\/p>\n<p><a href=\"https:\/\/financialpost.com\/real-estate\/homebuilding-costs-canada-soar-population-surges\" target=\"_blank\" rel=\"noopener\">Homebuilding Costs in Canada Soar 51% as Population Surges<\/a> by Curtis Heinzl | Bloomberg News | Financial Post<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Surging construction costs in Canada are putting new pressure on home prices, worsening a severe affordability crunch, according to the nation\u2019s largest lender. A gauge of residential construction prices has &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2023\/07\/the-cost-of-building-a-home-in-canada-has-never-been-higher\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-22250","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Cost of Building A Home in Canada \u2026.. 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