Cost growth was the strongest in Toronto, says the national statistics agency
Residential building construction costs grew by 1.9% in the second quarter, building on the 1.8% increase seen during Q1, according to Statistics Canada.
In its analysis of 11 major census metropolitan areas, StatCan said that annual and quarterly growth in construction costs for residential structures was the strongest in Toronto (13% and 3.8%, respectively).
On the other hand, the markets that posted the worst quarterly cost declines were Edmonton (down by 1.2%) and Saskatoon (down by 0.3%).
“Skilled labour shortages, cost of materials and labour rate changes were reported by contractors as key factors impacting the construction sector,” StatCan said.
“The diverging price movements of key construction materials impacted residential construction costs. In the second quarter, prices continued to rise for cement and ferrous metals, while they declined for lumber, plastics and non-ferrous metals.”
By asset class, the greatest increase in building costs were seen in high-rise apartments (2.8%), followed by single-detached homes (1.8%).
Canadian Home Builders' Association warns of slower home starts due to rising construction costs from recent rate hikes. Chief Executive Kevin Lee calls for government action to offset the impact.https://t.co/UhRksMGfRd#mortgagenews #mortgageindustry #ratehike #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 24, 2023
Costs also up for non-residential projects
Non-residential building costs rose by 1.5% in the Q1, following a 1.7% increase in Q1, StatCan said.
“Non-residential building construction costs grew the most for structural steel framing (+2.6%) in the second quarter, followed by concrete (+2.5%) and metal fabrications (+2.4%) divisions,” the agency said.
“The continued increase in concrete prices drove the rise in costs, as concrete is a major component in non-residential construction.”
