Undeterred by supply-chain interruptions and restrictions on assembly and transportability, homebuilders persisted with new home builds as demand surged over the past year.
A report just released by the Canadian Home Builders Association (CHBA) credited the strength and resilience of the residential construction sector, which had been deemed an essential service and resumed in May of last year.
Homebuilding and renovation helped support the economy as several other industries floundered because of pandemic-related constraints. In 2020, residential construction employed 1.24 million Canadians, both in on and off-site roles, while providing just over $80 billion in wages. 58 percent of jobs are in renovation, while the remaining 42 percent are related to new home construction.
The report also chronicles how shortages in both labour and materials factored in construction and the subsequent price increase for new build homes.
A survey conducted by CHBA reported that 21 percent of builders struggled with new staff recruitment and retention, as countless companies were crushed by waves of supply chain disruption. The unforeseen lumber price increase added on average $19,254 to the bottom line cost of a home.
Nearly 60 percent of builders mentioned considerable delays in project completion due to supply chain stoppages, with an average of six weeks. Along with lumber, builders faced difficulties in procuring appliances, doors and windows and plumbing equipment and fixtures. Consequently, delays in construction created an imbalance between housing demand and supply, pushing housing prices even further.
The sharp rise of house prices undoubtedly affected an acceleration in housing construction. If impending changes to financial and regulatory structure back new housing, and the labour and material can answer the need, builders should have little problem ramping up production to benefit from the current house price landscape.
The pandemic created quite the increase in demand for low-rise housing. The white collar group began working from home, thus, raising demand for larger-sized homes. The CHBA reported that construction of single detached and row homes rose by 130 and 104 percent respectively, between January and May 2021.