Construction Costs Are Up

Residential building construction prices went up 5.6 per cent in the first quarter, the largest increase since 2017, says Statistics Canada. A shortage of construction materials saw the price for softwood lumber rise 11.9 per cent month-over-month, and veneer and plywood were up 20.1 per cent in March due to low stocks following the temporary shutdowns of sawmills in the first wave of COVID-19. Along with the material shortages, low interest rates and homeowners desiring more living space during the pandemic also led to the surge in residential construction costs. Non-residential building construction costs also rose ‒ 2.1 per cent for factories and 1.8 per cent for warehouses in the first quarter. Building costs were up for every building type in the first quarter, including a 1.2 per cent increase for office buildings, a 6.9 per cent gain for townhouses, and an increase of 6.8 per cent for single-detached houses.