Canadian home builders have faced soaring labor and material costs, and now there’s confirmation. The Statistics Canada (Stat Can) building construction price index made a record climb in the second quarter of 2021. Costs jumped significantly higher for homebuilders, even if just compared to non-residential construction. Homebuilders saw the fastest increases in “hot” housing markets like Ottawa and Toronto.
Residential construction costs are soaring, as labor and materials get squeezed. Costs increased 7.5% in just the second quarter of 2021. This is a sharp acceleration from the 4.9% increase seen in the first quarter of the year. Stat Can said it was the largest jump in construction costs over the history of the index. Though the index only goes back to 2017, so it most likely is the biggest increase in a couple of decades.
On an annual basis, construction costs for residential housing soared. The agency estimates annual growth at the national level was 18.8% for the second quarter of 2021. Costs increased the fastest in Calgary (+31.4%) and Ottawa (+28.4%), with Toronto and Edmonton in a tie for third (+22.4%). Yes, cost inflation is reminiscent of the size of inflation seen in the early 1980s…read more.