Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
per week
for 24 weeks
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A waterfront home under construction in the tourist destination of Picton, Ont., on May 8, 2021.


Home builders across Canada are getting hit by a string of supply-chain disruptions, resulting in widespread product shortages and explosive costs for the industry.

In some cases, home construction is months behind schedule as developers struggle to source everything from lumber to PVC pipes, insulation to windows. Builders are also holding back on presales, unable to accurately price their homes too far in advance, given that material costs can fluctuate wildly on a daily basis.

Some have resorted to using “escalation clauses” in their contracts with buyers to account for potential price hikes. Ultimately, the situation is adding tens of thousands of extra dollars to the typical new home – a cost that is hitting buyers’ wallets at a time of voracious demand in the market and affordability concerns.

Story continues below advertisement

Red-hot lumber prices ease pressure on Trudeau to reach softwood deal with U.S.

Lumber mania: How supply constraints in B.C. are colliding with insatiable demand in the U.S. to push lumber prices through the roof

U.S. home builders push for new U.S.-Canada softwood deal

“The whole supply chain is out of whack,” said Matt McCurrach, president of Homex Development Corp. in Kamloops, B.C.

“It’s getting worse and worse every day,” added Sue Wastell, president of Wastell Homes in London, Ont. “Literally every day, we’re finding out something else is not arriving when it was scheduled to. … We’ve never seen anything like this.”

After a brief slowdown when COVID-19 hit, residential construction is booming in Canada and the United States. Many homeowners have put their pandemic savings toward renovations. With so much demand for anything home-related, manufacturers have struggled to keep up.

Lumber is a prime example. Production tumbled last year as COVID-19 escalated. Prior to that, a number of B.C. sawmills were shuttered, owing to anemic prices and lower log supplies. Now, the industry is playing catch up, with lumber prices surging more than 300 per cent from a year ago.

On lumber alone, the cost of building a 2,600-square-foot home has risen by about $40,000, Ms. Wastell said.

Under normal circumstances, she would release upwards of 50 homes for presale at a time. That’s ebbed to between four and six, given the lack of clarity on what her construction costs will be.

“The supply levels of availability are really shrinking,” she said.

Story continues below advertisement

Curtis Mercer, the head of K & P Contracting Ltd. in St. John’s, said costs are up roughly $20,000 for a 1,200-square-foot home. Because of price changes, he’s amending his contracts three or four times before they reach buyers.

“There are times when I feel bad offering prices to some of my clients, because they’re outrageous,” he said. For certain items, “it’s extremely overpriced, in my opinion.”

It goes well beyond lumber. For Mr. Mercer, the biggest source of delays is plumbing fixtures. For Ms. Wastell, there were no electrical panels recently in London. And for Mr. McCurrach of Kamloops, it’s especially tough to find engineered materials, such as floor joists and roof trusses.

“Quotes are only good for seven days, and you can’t even lock in pricing at this moment,” said Mr. McCurrach, who’s currently building a 31-unit condominium. “Until we can lock in every number, we won’t start selling.”

For consumers, the impact is clear. The price of a new home shot up 7.9 per cent in March, the largest 12-month gain since 2007, according to Statistics Canada data of contractors’ selling prices. Prices rose in all 27 metropolitan areas that were surveyed, paced by Ottawa, up 17.3 per cent.

Even so, buyers are undaunted. Statscan cited lower mortgage rates, remote work from home and the desire for more space as factors spurring demand. And with fewer presales up for grabs, that’s creating more competition, the agency said.

Story continues below advertisement

Ms. Wastell said between 70 per cent and 80 per cent of her buyers are coming from the Greater Toronto Area, a trend that predates the pandemic. “People are buying things without ever going through a model home,” she said. “There’s a ton of pent-up demand.”

Still, there is trepidation over how much the consumer can bear and the extent to which developers are willing to absorb some of the costs. Kevin Lee, chief executive officer of the Canadian Home Builders’ Association, said some developers are building less than they otherwise would, on account of supply and cost pressures.

Mr. McCurrach said his condo project in Kamloops, which is set to begin framing in July, should proceed as planned. But with costs escalating so much, that’s not guaranteed.

“If it becomes unviable to do the project, then we’ll have to stop,” he said. “I don’t think we would be the only ones.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies