Advertisement

Lumber industry and home building materials seeing a drastic increase in price, shortages

Click to play video: 'Lumber industry seeing drastic price increase and shortages' Lumber industry seeing drastic price increase and shortages
WATCH: The lumber/home building material industry has seen a drastic increase in prices and shortages. As people continue to buy homes and do renovations, the industry is having a hard time keeping up as it feels the effects of a number of different factors – Apr 10, 2021

Due to COVID-19, many people are passing the time on their hands with home renovations, buying or even building a new home in Saskatchewan.

Western Retail Lumber Association president Liz Kovach says it’s not just the lumber industry seeing challenges at this time.

“The lumber is a component of it,” Kovach said. “Typically the lumber package includes the roofing, the flooring, sheathing, everything. It usually represents four per cent for the sale of the house. In building it’s between six to eight per cent. Right now it’s at around 15 per cent.”

Read more: Bidding wars and moving to the suburbs — Saskatchewan’s real estate market booming

Kovach told Global News the price of lumber has soared to an all-time high.

Story continues below advertisement

In April 2019, the price of a common lumber western spruce and fir two-by-four was around US$400 for every 1,000 cubic board feet. That price is nearly three times that amount today at just over US$1,100 for every 1,000 cubic board feet. The average since 1999 has remained around the US$400 mark.

Kovach added that the demand for lumber dropped drastically in late winter of last year and the commodity industry is very much supply versus demand-driven.

“It’s snowball effect from March when the demand for lumber fell off of a cliff,” Kovach said. “The pandemic (lockdowns) forced mills to close, they had to curtail their operations.”

Click to play video: 'Stats suggest people are preferring city life in Saskatchewan' Stats suggest people are preferring city life in Saskatchewan
Stats suggest people are preferring city life in Saskatchewan – Apr 3, 2021

Mike Wagner, the general manager and president of Daytona Homes Saskatchewan, says over the past six months the cost of a home has increased roughly $50,000. He adds the industry hasn’t felt the full effect of any shortages.

Story continues below advertisement

“I think this summer is where we are going to see the shortage of the material hit,” Wagner said. “So far, it has been more of the pricing impact on the industry.”

According to Kovach, product lines have been affected greatly this year.

“The (February) freeze in Texas has created setbacks as the plants that process resins and other raw materials to produce plants, adhesives, insulation and plastics used for a variety of product lines and industries as well (were affected).”

Transportation of goods has also been affected by the COVID-19 pandemic. One truckload carries 28,000 board feet, while train rail cars can hold 100,000 to 112,000 board feet.

Read more: Saskatoon mother evicted 11 days after childbirth struggles to find housing

Kovach says traditionally the price balances out at some point and doesn’t remain high forever. She expects that to happen again.

Wagner adds it’s important to inform people of possible delays and to preach patience.

“To give them a firm schedule just can’t happen,” Wagner said. “There are too many spots that are questionable for getting materials on time.”

Read more: How will Canada’s housing bubble impact first-time buyers? A financial expert breaks it down

Story continues below advertisement

Experts in the housing market say it remains strong in centres such as Saskatoon and Regina as people continue to purchase new homes, build new homes or do home renos during the pandemic.

Click to play video: 'Lumber prices causing some uncertainty for renovations' Lumber prices causing some uncertainty for renovations
Lumber prices causing some uncertainty for renovations

Sponsored content