Covid has been affecting Canadian businesses since March. We’ve seen smaller stores close, larger chains reducing their number of locations and the prices of some items shoot through the roof. Lumber is one of those items. If you’ve recently tried to build a fence or replace a deck, you’ve likely seen a change in prices; and potentially had a difficult time finding lumber in the first place. So, how is this lumber shortage affecting home prices?
Mortgage broker news reports that “COVID has impacted operating capacity and efficiencies across the supply chain, from logging operations, mills and transportation systems to suppliers and retailers,” says Canadian Home Builders’ Association CEO Kevin Lee.
The increased lumber prices have to be made up somewhere. If your builder is fortunate and has a contract for lumber pricing in place then you’ll be saved the added costs. If that’s not the case Mortgage Broker News is estimating the increased costs to build at roughly $10,000 per typical single family home.
“Given the housing supply shortage that continues to place upward pressure on home prices, it will be important to ensure material shortages don’t exacerbate the problem,” Lee says. “While housing starts are rebounding well right now, it is housing completions that ensure we add more supply, and those are currently at risk of being further delayed.”
See the full report from Mortgage Broker News here.