Vancouver real estate analytics company launches its version of Zillow’s Zestimate

Pallavi Rao
other

 Offerland wants to create transparency in the housing market by empowering customers through data and insights

American real estate startup Zillow turned many heads on this side of the border when its Zestimate tool—which allows users to see the predicted value of homes—launched in Canada in 2018. 

Vancouver-based company Offerland is hoping for a similar result with its Zestimate-like tool, OfferValue. The company has partnered with two real estate listing portals (Fisherly and BCCondosAndHomes) to get OfferValue in front of more eyeballs.

Offerland is a data company, according to CEO and cofounder Hamidreza Etebarian. “We’re not trying to be Zillow,” says Etebarian, “We sell our data to companies like Zillow.”

Using their machine algorithmic-based projection models, users are given a market value of their homes, judge whether certain real estate is worth investing in, and learn how much rent they can ask for, from an “unbiased third-party,” says Etebarian.

Etebarian is also quick to point out that Offerland is not a listing portal, even if its marquee product, OfferValue, is essentially a Canadian version of Zestimate. 

OfferValue is a projection of how much a property is worth on the market based off a variety of data sources, including some “unconventional” ones like connectivity to public transport, traffic congestion, and distance from the beach.

The projected value is then tested against real sales that happen in the city, and the algorithm learns from errors if it makes them. All of this, Etebarian says, makes for a successful estimate each time.

“Our accuracy is at 96-plus percent,” he says, “which is six to seven percent more than our competitors.”

 

 

Credit: Offerland.ca

Users on Fisherly and BCCondosAndHomes can use the OfferValue tool on the platform for free, and Offerland receives an undisclosed percentage of the revenue generated on these platforms.

But real estate buyers and sellers aren’t their only customers. For the last two years, they’ve been selling their analysis to financial institutions.

“Banks use the home evaluation tool in their assessment and lending practices,” he says, “and we’re now working with three of the biggest financial institutions in Canada.” (Though Etebarian isn’t naming names.)

Aside from OfferValue, the company has also launched OfferRent, which gives renters an estimated quote as well as a real estate investment tool called OfferVest, which allows users to identify properties that would make good investments according to Offerland’s projections. 

In the projection, all costs, and expenses (including taxes, mortgages, utilities) are accounted for, and the estimate calculates whether a property will deliver a positive cash flow in the form of rent from the first month on the market.

“All property appreciates in five or ten years,” says Etebarian, “but we want people to make money today, not five years from now.”

Interested parties can sign up to OfferVest for free today and receive information about investment deals in an email or text. Launched in April, Etebarian says the product has gained significant traction.

“We have 120 subscribers already,” Etebarian says of the platform’s growth, “and five of them bought property in the last month.”

Business is good across the board for OfferValue, says Etebarian, especially since the company currently only operates in B.C. and Ontario. B.C.’s real estate market in particular hit record sales in the month of March this year, before tapering off but Etebarian is unperturbed by what this slight cool down means for his company.

“Real estate is like food,” he says, “people always need a place to live.”

Copyright © Canada Wide Media Limited

Travelling to or within Canada? The rules have changed. Here’s what you need to know

Sophia Harris
CBC Radio

 Travelling abroad? Coming home might be more complicated than you think. (Kevin Lamarque/Reuters)

Passport? Check. Plane ticket? Check. What about your vaccination documents and COVID-19 test results? Thanks to the pandemic, entering Canada now requires a lengthy checklist.

“You definitely have to be prepared and it’s not going to be the usual experience,” said Senka Dukovich of Toronto, who flew home from Croatia earlier this month. 

Even domestic travellers may face challenges when entering certain provinces. 

Here’s what you need to know about travelling to or within Canada, with the help of some Canadians who’ve already hit the road. 

Travelling to Canada

Anyone currently allowed to enter Canada can skip the 14-day quarantine if they meet the country’s requirements for being fully vaccinated. That means two doses of either the Pfizer, Moderna or AstraZeneca-Oxford vaccines, or one dose of the Johnson & Johnson product, at least 14 days before arriving.

Most foreigners are still barred from entering Canada but, as of Aug. 9, fully vaccinated U.S. citizens and permanent residents living in that country will be able to visit, and they won’t have to quarantine.

The federal government said it plans to allow fully vaccinated travellers from all other countries to enter Canada and skip quarantine on Sept. 7.

However, all fully vaccinated travellers allowed to enter still face other requirements. 

Dukovich, her husband Ted Read, and their five-year-old granddaughter Ksenija Callaghan, travelled to Croatia in June to visit family.

They had a two-day stopover in Paris before their final flight back to Canada on July 7, which meant the trio had to take COVID-19 tests during their stopover.  

 

Senka Dukovich, her husband Ted Read and granddaughter Ksenija Callaghan, travelled to home to Toronto on July 7 following a trip to Croatia. (Submitted by Senka Dukovich)

 

Travellers to Canada — even those who are fully vaccinated — must provide proof of a negative COVID-19 molecular test taken within 72 hours of arrival. Air passengers need to take the test within 72 hours of the scheduled departure time of their final direct flight to Canada.

Dukovich was pleased to discover that — at the time — France provided free COVID-19 tests.

“We got three COVID tests [for free] that would have cost at least $400,” she said. “No hassles, no waits, no appointment.”

However, Canadians departing France now won’t be so lucky; on July 7, the country stopped providing free tests to tourists outside the EU.

Travellers to Canada must submit their travel information to the federal government using the ArriveCAN app or by registering online within 72 hours before their arrival. 

“You had to upload documentation for both your first and second dose,” said Dukovich who submitted the family’s application from a hotel room in Paris. “We just had our phone, so you can imagine, trying to do this on the little phone.”

On arrival

When travellers finish inputting their information, they’re emailed a receipt to show a Canadian border officer upon arrival, along with their COVID-19 test results and any vaccination documents.

On July 9, Shawn Plancke, a Canadian who lives in Barcelona, flew to Halifax with his wife, Samantha McGuinness, and three children. He advises travellers to pack hard copies of their documents before departing for Canada. 

“I know this is going against society these days, but print it out,” he said. “I would not have wanted to be flipping through my phone [for documents].”

Currently, both land and air travellers will be tested for COVID-19 upon arrival in Canada, or be given a home test kit. The federal government provides the tests for free and travellers can pre-register online to save time. 

However, starting Aug. 9., fully vaccinated travellers will not need a post-arrival test unless they have been randomly selected to take one.

Dukovich and her family landed in Montreal. She said they received home test kits instead of an on-site test, because they had a connecting flight to Toronto.

“On the way out, they just handed us kits like they were giving you a lunch box,” said Dukovich. 

At home, she had to go online and be guided by a nurse via video conference who provided instructions including “counting down the seconds you have to have the swab in your nose,” said Dukovich. 

That same day, Purolator picked up the tests. 

Travelling with children 

Fully vaccinated travellers don’t have to quarantine while waiting for their test results. But Dukovich thought that she and her husband were required to, because their five-year-old granddaughter — who’s staying with them — isn’t vaccinated.

Children under 12 are currently not allowed to get vaccinated in Canada. 

It was only on day three of their quarantine that Dukovich learned from a quarantine officer that only her granddaughter had to quarantine. 

“That was a relief,” said Dukovich. “My husband and I are free to go out.”

Unvaccinated travellers — or those who got a vaccine currently not recognized by the Canadian government — must quarantine for 14 days. Those entering by air must also spend up to three of those days in a quarantine hotel — a rule that will end on Aug. 9. 

However, unvaccinated children under 18 can head home with their vaccinated parents. Currently, they must quarantine — even though their parents can leave the house. But that rule will also change on Aug. 9, when the government will start allowing unvaccinated children under 12 to skip quarantine — as long as they avoid group settings such as school, camps and daycares.

Travelling within Canada

The rules can also be complex for domestic travellers. 

Air passengers travelling within Canada don’t have to take a pre-arrival COVID-19 test.

However, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Manitoba and the territories still require some inter-provincial travellers to quarantine.

The rules can vary depending on your vaccination status and/or where you’re travelling from. For example, most of the Atlantic provinces now allow travellers from within Atlantic Canada to enter, regardless of their vaccination status. 

The rest of Canada can skip quarantine in the Atlantic provinces if fully vaccinated or, in the case of New Brunswick and Newfoundland and Labrador, have at least one dose. 

Fully vaccinated travellers can also skip quarantine in Manitoba and the territories. 

Manitoba, Yukon and the Atlantic provinces also exempt from quarantine unvaccinated children under 12 — if all their vaccinated guardians meet the exemption requirement. In Nova Scotia, the rule applies to unvaccinated children ages 18 and younger. 

However, because traveller Plancke and his family flew from Barcelona to Halifax, his three children must follow the current federal rules and quarantine for 14 days — despite that fact that both parents are fully vaccinated.  

“It’s quite confusing when you have strict stricter rules, federally, and then you have other rules provincially,” said Plancke. 

The provinces and territories listed here may have further requirements for tourists, so travellers to those regions should check the rules online before packing their bags.

For example, the Atlantic provinces require certain visitors to pre-register, and travellers to Nunavut must first get authorization. Also, the Northwest Territories still bars most leisure travellers.  

 

Fully vaccinated Shawn Plancke and his wife, Samantha McGuinness, were exempt from quarantine after entering Canada. But their three children were required to quarantine for 14 days. (Submitted by Shawn Plancke)

©2021 CBC/Radio-Canada. All rights reserved

Market takes another step towards normalcy as Canadian home sales fall again in June: CREA

Michelle McNally
Livabl

After a record-breaking spring for Canadian home sales, buying and selling activity across the country has continued to trend downward during the early summer months.

In its National Statistics report released today for June, the Canadian Real Estate Association (CREA) announced that Canadian home sales declined by 8.4 percent between May and June 2021.

This marks the third consecutive month of dwindling home sales since the market set an all-time record in March 2021, CREA said.

Following the springtime peak, CREA reports that sales are now down a cumulative 25 percent. However, June transactions still set a record, with the number of transactions up 13.6 percent year-over-year, a new high for the month.

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Although market activity remains robust in many communities, CREA’s chair Cliff Stevenson explained that conditions have “noticeably calmed down” during the past few months.

“There remains a shortage of supply in many parts of the country, but at least there isn’t the same level of competition among buyers we were seeing a few months ago,” said Stevenson in the news release that accompanied the June report.

The number of new properties that hit the market dropped 0.7 percent in June compared to the previous month. The national sales-to-new listings ratio was 69.2 percent last month, the lowest reading since August 2020, CREA reported. The long-term average for the national sales-to-new listings ratio was reported at 54.6 percent, and has been steadily moderating since peaking at 90.8 percent in January.

By the end of June, there was a 2.3-month supply of available inventory nationwide, a slight increase over  May’s 2.1 months of supply and the record-low of 1.8 months that was set in March.

With little change recorded on the national level for new home supply during June, CREA noted that about half of local markets saw gains, which is “welcome news for frustrated buyers.” When comparing sales-to-new listings ratio with long-term averages, more than half of local markets were also reported to be in balanced territory last month — a shake up from the past year when a larger portion of communities were in seller’s market territory, CREA said.

“It feels like maybe the theme of this summer is ‘slowly getting back to normal,’ in our own lives and for many housing markets across Canada as well,” said Shaun Cathcart, CREA’s Senior Economist, in the report.

“That said, it’s a long road to get back to normal, and for many housing markets the main issue is that supply shortages are as acute as ever,” he added.

Cathcart pointed out that the break we’ve seen in terms of population growth is likely coming to an end. While the “frenzy and emotion” of the earlier points of the pandemic have passed, Cathcart explained that the makings of a seller’s market are still in place.

Last month, the aggregate composite MLS Home Price Index (HPI) increased by 0.9 percent monthly, while the non-seasonally adjusted aggregate composite MLS HPI was up 24.4 percent annually.

The actual — not seasonally adjusted — average price of a home at the national level was a little over $679,000 in June, 25.9 percent higher than the same month in 2020. CREA noted that the average national home price is heavily influenced by Canada’s two most expensive markets, Greater Vancouver and the Greater Toronto Area. Factoring out these two regions would reduce the national average price by about $135,000, said CREA.

© 2020 BuzzBuzzHome Corp.

Book a private appointment to tour the newly-opened showhomes at Kai Kitsilano

Jim Pattison Developments LTD
Livabl

Now selling, Kai is a boutique collection of twelve modern townhomes located in the heart of Kitsilano, one of Vancouver’s most coveted neighbourhoods. Prospective buyers are now able to schedule a private appointment to tour the development’s two showhomes, providing a first-hand look at the contemporary finishes, thoughtful layouts and added conveniences that each three-bedroom plus flex townhome has to offer. 

 Kai will be move-in ready later this summer, meaning buyers won’t have to wait long to enjoy their brand new home by local developer, Vicini Homes. Priced from $1,850,000, the residences come in two sophisticated colour schemes curated by the award-winning interior designer Cristina Oberti.

The showhomes exhibit both options – the kitchen in 2123 West 7th Avenue (Townhome 11) features light wood-toned upper cabinets paired with crisp white lowers, while 2121 West 7th Avenue (Townhome 12) showcases all-white kitchen cabinets contrasted with walnut-stained wood accents.

 Ranging in size from 1,042 square feet up to 1,432 square feet, every townhome at Kai boasts an open-concept layout with continuous flow, oversized windows for ample natural light, engineered hardwood flooring throughout, and nine-foot ceilings in main living areas for an airy feel. The convenient flex space on the second level is perfect for a home office or additional storage.

 In the chef-calibre kitchens, engineered quartz countertops are paired with a full-height quartz backsplash for a sleek, uniform look. The custom millwork cabinetry includes satin aluminum pulls, soft-close hardware and a space-maximizing pantry. Each townhome comes with full-size Miele stainless steel appliances, including a four-burner gas cooktop, convection wall oven and an integrated counter-depth refrigerator. And for easy cleanup, a deep undermount stainless steel sink is accented with a single-lever Grohe chrome faucet and a pull-out spray handle.

 The master retreat was designed with relaxation in mind, and comes complete with a private top-level deck, a spacious closet with a built-in organization system, and a spa-inspired ensuite bathroom featuring a quartz-topped double vanity, mirrored medicine cabinets, marble-inspired porcelain tiled walls, and a frameless glass shower with a rain showerhead and Grohe plumbing fixtures.

 Among the convenient extras are built-in air conditioning, a deluxe-stacked LG front-load washer and dryer, additional storage on the parkade level, and a natural gas barbecue outlet and hose bib on the private patio. The homes boast direct access to the secured underground parking, and include a secure underground bicycle locker and a 120/208 volt vehicle charging outlet.

 Kai is just a five-minute walk to vibrant West 4th Avenue, dotted with sportswear stores, coffee shops, must-try restaurants, lively pubs, yoga studios and much more. Kits Beach is also nearby, offering residents the opportunity to swim laps in the pool, plunge into the ocean, play tennis or simply watch the sunset. The neighbourhood touts a Walk Score of 96 and is mere moments away from the future Arbutus SkyTrain station.

With three homes already sold opening weekend and only nine remaining, don’t miss your opportunity to purchase a home within this exclusive collection. To schedule a private appointment to tour the showhomes located at 2121 West 7th Avenue in Vancouver, please contact Jenny Wun at [email protected] or call 604 961 3559.

For the latest news and updates, register your interest today at vicinihomes.com/kai.

Sales by Jenny Wun – Personal Real Estate Corporation with the West One Real Estate Team | Oakwyn Realty Ltd.

© 2020 BuzzBuzzHome Corp.

Vancouver Beach Avenue rental tower sells for $91 million

Avison Young
Western Investor

One of the biggest multi-family deals in Vancouver for 2021, the 151-unit, 21-storey landmark concrete tower is on Beach Avenue with unobstructed ocean views.

 

 

Property type: Multi-family rental
Location: 1155 Beach Avenue, Vancouver
Number of units: 151
Number of storeys: 21
Lot size: 37,179 square feet
Land size in acres: 0.85 acres
Date of sale: July 8, 2021
Brokerage: Avison Young, Vancouver (representing the purchaser).
Brokers: Carey Buntain, Rob Greer, Bijan Lalji and Chris Wieser.

© 2021 Western Investor

Aldergrove 4.4-acre land assembly sells for $7.6 million

Varing Marketing Group
Western Investor

Two adjacent properties assembled and sold as a package for residential development

Property type: Land
Location: 25639 and 26771 24 Avenue, Aldergrove, B.C
Size of land: 193,406 square feet
Size of land in acres: 4.44 acres
Zoning: SR-2 (suburban residential)
List price: $8 million
Sale price: $7.6 million
Brokerage: Varing Marketing Group, Surrey, B.C.
Broker: Joe Varing

© 2021 Western Investor

Surrey three-lot land assembly sells for $4.1 million

Home life Advantage
Western Investor

Located in the Guildford area, the 0.61-acre site has holding rental income and potential for multi-family development.

Type of property: Land assembly
Location: 10312 142 Street – 14237 103 Avenue, Surrey, B.C.
Land size: 26,825 square feet
Land size in acres: 0.61 acres
Zoning: RF (residential)
OCP: Multi-family
List price: $4.29 million
Sale price: $4.1 million
Brokerage: Homelife Advantage Realty Ltd., Chilliwack. B.C.
Broker: Rick Toor

© 2021 Western Investor

Chilliwack 0.2-acre downtown site sells for $1.52 million

Homelife Advantage Realty Ltd.
Western Investor

The site, currently with three commercial addresses, sold with development potential on a prime site in the downtown core.

Property type: Land

Location: 45951- 45963 Wellington Avenue, Chilliwack, B.C.

Number of units: 3

Size of property: 8,712 square feet

Land size in acres: 0.2 acres

Zoning: C3

List price: $1.59 million

Sale price: $1.52 million

Date of sale: June 29, 2021

Brokerage: Homelife Advantage Realty Ltd., Chilliwack. B.C.

Broker: Rick Toor

 

© 2021 Western Investor

Bank of Canada willing to let inflation run hot on road to ‘complete’ recovery

Kevin Carmichael
other

Kevin Carmichael: Policy-makers argue they’re taking a calculated risk — and one worth taking

 Bank of Canada Governor Tiff Macklem still plans to keep the benchmark interest rate pinned near zero until at least the second half of next year. Photo by Reuters/Blair Gable/File Photo

The Bank of Canada plans to let inflation run faster than its two-per-cent target through 2023, reinforcing governor Tiff Macklem’s pledge to orchestrate a “complete” recovery from the COVID-19 recession.

 

Canada’s central bank on July 14 published new forecasts predicting the country is on the verge of an impressive burst of economic growth that will offset a disappointing start to the year.

The projections weren’t strong enough to alter Macklem’s plan to keep the benchmark interest rate pinned near zero until at least the second half of next year, but evidence of gathering momentum prompted policy-makers to pare their weekly purchases of Government of Canada bonds to $2 billion, from $3 billion previously. 

 

“This adjustment reflects continued progress towards recovery and the bank’s increased confidence in the strength of the Canadian economic outlook,” Macklem and his deputies on the Governing Council said in a statement at the end of their latest round of interest-rate deliberations.

 

The decision to taper the bond-buying program was widely expected by observers of the central bank, as was an upward revision to growth projections for the second half of the year and 2022.

The short-term trajectory of the economy is correlated with vaccination rates and infections; the former in Canada are now among the world’s highest, and provinces have mostly relaxed the social-distancing measures they implemented to fight COVID-19’s third wave this spring.

Macklem’s forecasting team sees growth surging to an annual rate of 7.3 per cent in the third quarter, compared with two per cent between April and June, as consumers begin to spend some of the savings they accumulated during COVID-19 lockdowns.

The new prediction represents a shift in the central bank’s thinking about the recovery. Previously, officials assumed Canadians would keep whatever cash they accumulated during the pandemic in the bank. Now, they assume that we’ll spend about 20 per cent of that hoard, citing survey data that show households are keen to celebrate the pandemic’s end.

 

“Consumption is expected to continue to lead the recovery,” Macklem said in a statement about the Bank of Canada’s policy meeting and the new outlook.

The third wave of infections took a bigger toll on the economy than policy-makers thought it would at the time of their last forecast in April, forcing a downward revision of its outlook for economic growth this year to six per cent, from 6.5 per cent. But it assumes the economy will make up for it next year, when the central bank predicts gross domestic product will increase 4.6 per cent, compared with a previous estimate of 3.7 per cent.

Still, the good news related to an accelerating recovery could be partially offset by consternation over the inflation forecast, since it shows the central bank has chosen to put employment ahead of its target for annual increases in the Consumer Price Index.

 

The Bank of Canada’s two-year forecasts almost always have the CPI at two per cent at the end of the projection period, because, typically, interest rates would be adjusted to bring about that outcome. For now, the central bank predicts CPI inflation of three per cent this year, 2.4 per cent in 2022 and 2.2 per cent in 2023. 

 

The strategy is risky because households, executives and investors could start to assume the central bank has gone soft on inflation and adjust their own expectations accordingly. If that were to happen on a wide scale, upward pressure on prices would increase, pushing the CPI even higher. The central bank might have to raise interest rates more quickly than it would like, threatening a recession.

 

Policy-makers argued that they’re taking a calculated risk — and one worth taking. Investors and analysts tend to emphasize the inflation target, but the Bank of Canada actually gives itself more latitude than many believe. It aims for two per cent, but is comfortable with misses as high as three per cent and as low as one per cent. It still sees inflation staying within that comfort zone.

“I don’t know if they are going soft” on inflation, said Tom O’Gorman, director of fixed income at Franklin Templeton Canada, adding that inflation rarely breached two per cent before the pandemic, which some critics used as evidence that the Bank of Canada was too conservative. “For inflation to run a little hot with the pandemic and the supply-chain issues, it’s probably appropriate.”

 

Macklem argued that the strongest forces affecting prices will pass. Currently, the cost of gasoline is the biggest one, because production hasn’t yet caught up to the demand that has come with the global economic recovery. Supply constraints related to the crisis also are affecting inflation, and prices that plummeted during the recession are coming back as things return to normal.

Policy-makers emphasized that the recovery shouldn’t be taken for granted. They described the uncertainty over their outlook as “unusually high,” flagging four risks at the end of their quarterly economic report that could end up putting downward pressure on inflation, compared with two potential surprises that could lead to faster price increases.

 

But, ultimately, Macklem has chosen to err on the side of growth rather than striving to hit his inflation bullseye. The central bank noted that the economy is generating significantly less output than it could in normal circumstances, and, when considering population growth, employment is still 550,000 positions below its pre-pandemic trajectory.

“We have one target, and that’s inflation,” he told reporters. “If we have excess slack in the economy, that means we’re missing jobs, we’re missing income, we’re missing spending. That will put downward pressure on inflation and we won’t sustainably achieve our inflation target.”

• Email: [email protected] | Twitter: CarmichaelKevin

© 2022 Financial Post

B.C. builders weathered pandemic – but storm clouds are forming

Peter Mitham
Western Investor

‘Absolutely nothing has changed with us,’ says one Abbotsford contractor as provincial construction returns to its post-pandemic pace – but high demand is leading to skyrocketing costs and a lack of skilled trades

Rising lumber costs and a potential labour shortage cloud rosy outlook for B.C. construction. | Rob Kruyt

‘Absolutely nothing has changed with us,’ says one Abbotsford contractor as provincial construction returns to its post-pandemic pace – but high demand is leading to skyrocketing costs and a lack of skilled trades

Construction is one of the largest single sectors of the B.C. economy, accounting for nearly 10 per cent of the province’s GDP. The housing, institutional and infrastructure projects the sector’s 225,000 workers deliver each year made the sector an essential service when COVID-19 hit.

Now, as the economy returns to normal, it’s almost as if nothing has changed.

But warning flags are rising on input costs and a potential labour shortage.

According to the Independent Contractors and Businesses Association, construction activity fell by just under 10 per cent in 2020. But, by the end of the second quarter 2021, construction activity had snapped back to pre-pandemic levels.

The value of major projects proposed and on the go in the province increased 5 per cent to $349 billion in March versus a year ago. Statistics Canada is forecasting nearly $33.4 billion worth of new construction investment in B.C. this year, driven by the public and institutional sectors as well as transportation and logistics.

“Absolutely nothing has changed with us,” said Kevin Mierau, president of Mierau Contractors Ltd. in Abbotsford, which handles commercial projects as well as some multi-family construction.

A director of the Vancouver Regional Construction Association (VRCA) and the BC Construction Safety Alliance, Mierau said the industry was able to quickly implement safety protocols that complied with public health requirements. Those remain in place and have kept the industry working through the pandemic and into reopening.

“We really nailed down our process and protocol on site,” he said.

What has changed as the broader economy has returned to normal is construction costs. As construction returns to normal, demand has pushed prices for many materials sky-high. While lumber has grabbed headlines, almost all materials are affected.

According to Statistics Canada, costs for lumber and wood products were up 226 per cent in May relative to January 2020, while fabricated metal products and construction materials had increased 114.7 per cent. The cost of cement and glass was double that of January 2020.

“COVID protocols that have been put in place in a lot of manufacturing facilities quite simply reduced productivity,” Mierau said. “They’re producing less, but they’re having orders for more, so it comes to a point where no matter what the price is, [builders] just can’t get enough for what they need to build.”

VRCA vice-chair Craig Mitchell of Black Box Modular Solutions in Vancouver says the situation means builders need to take what’s available rather than be choosy. This is the case for everything from pipes to electrical panels.

“Right now we’re just telling owners, ‘This is what you get; you don’t get a choice anymore,’” he said. “To keep projects moving, it’s whatever is in stock that doesn’t affect schedule is pretty much what a lot of owners are having to go with now.”

While lumber prices could come back to more acceptable levels by the end of the year, Mitchell expects supply chains to be challenged well into 2022 and potentially beyond. With housing in demand and infrastructure projects such as the Broadway subway project in Vancouver starting up, building materials will be in high demand.

“There’s going to be a lot of construction for the next two years here, and that’s just going to put further pressure on the supply chain,” he said.

The good news is that money is cheap thanks to low interest rates, keeping projects moving. While this could stoke inflationary pressure, core inflation has shown few signs of budging. Moreover, end-users – at least of housing – have been willing to absorb the increases.

“People are willing to pay that price in this market, and that’s going to be the driver,” Mitchell said. “We’re seeing pressure on pricing in construction materials, but … I haven’t seen a slowdown.”

Higher prices for materials are compounding elevated prices for labour, an issue that persisted through the pandemic. The industry continues to face a shortage of new skilled workers to meet the projected demand of 60,000 workers by 2030.

ICBA president Chris Gardner said a new compulsory training regimen the province is introducing for trades adds to the regulatory burden on builders. A recent World Bank study ranked Canada 64th for permitting times, and new regulations as well as rising construction costs will further hamper new development.

“The dramatic and rapid price increases on nearly every construction material has been staggering,” Gardner said. “Owners are seeing bids for projects skyrocket and contractors are no longer able to provide fixed price quotes for work. If the situation does not ease, there could be a knock-on effect of project delays compounding cost and affordability pressures.”

The impacts are already being felt, Mierau said.

“Every project that’s over budget takes a little more from the pot for the next ones,” Mierau said. “We’re that next round away from seeing cutbacks, or things slowing down, in what conceivably should be a hot market.” 

© 2021 Western Investor