Ontario Construction News staff writer
Statistics Canada’s building construction price index is reporting record jumps for building costs in the second quarter of 2021, with significantly higher increases for homebuilders, compared to non-residential construction. Homebuilders saw the fastest increases in “hot” housing markets like Ottawa and Toronto.
Residential construction costs led the way with increases topping 7.5 per cent from April 1 to June 30, 2021 – compared to 4.9 percent in the first quarter of the year. That’s the largest jump in construction costs since the index started in 2017.
Annually, construction costs for residential housing have soared across the country, with an estimated growth of 18.8 per cent for the second quarter of 2021. The largest increases were in Calgary (+31.4 per cent) and Ottawa (+28.4 per cent), with Toronto and Edmonton in a tie for third (+22.4 per cent).
Non-residential building costs – primarily office buildings, warehouses and shopping centres – were also higher, but at a slower rate with prices jumping 3.7 per cent in the second quarter of 2021.
The top cities for non-residential construction cost increases were Ottawa (+10.1 per cent); Montreal (+8.4 per cent); and Toronto (+7.7 per cent).
Higher residential building construction prices in the second quarter were caused primarily by record high lumber and wood product prices that surged 27.9 percent from the first to the second quarter of 2021, Stats Can reported.
Ongoing supply chain constraints, combined with high demand for new houses and renovations and more space during the COVID-19 pandemic, as well as low-interest rates are credited for driving the increases.
Additional demand from the United States added to building material shortages in Canada.