Residential construction supply pricing in Around Town

February 18, 2021

Your Weekly Construction Briefing

According to a February StatsCan report, prices for residential building construction increased at a faster pace in the 4th quarter (+2.9%) than in the 3rd (+2.5%) in 2020. The gain in the fourth quarter was the largest on record. Conversely, non-residential building slowed in the 4th quarter (+0.4%) compared with the 3rd (+0.5%).

Statistics Canada is reported the largest ever increase in the price of residential building construction in the fourth quarter of 2020.

Year over year, residential building construction costs (+6.6%) rose at four times the pace of non-residential construction (+1.5%).

Typically, the seasonal nature of the construction sector results in less activity in the winter months and provides sawmills with the opportunity to restock their log yards. However, COVID-19 related shutdowns of sawmills made it more difficult to harvest logs. The tight supply drove up prices for softwood lumber (+78.8%) in December 2020 compared with December 2019.

Prices for lumber and Vancouver Island residential housing is expected to increase in 2021, due to a low inventory of lot and land, increased construction costs and higher wages. Buckle up and stayed tuned.

Source: StatsCan Reb Report, 2021.

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