'I haven’t seen anything like this': Lumber prices hit historic high on Vancouver Island
VICTORIA -- At the start of the pandemic, Vancouver Island lumber mills had to stop production and close down while at the same time, B.C.’s construction industry continued to hum along.
Now, the law of supply and demand has sent the price of materials through the roof.
“I think that built up demand that they couldn’t meet and now they’re trying to fill those orders,” said Roy Kulmala, CEO of the Vancouver Island Construction Association.
“Lumber prices have basically doubled since this time last year,” added Frank Clarke, operations manager at Lumber World in Saanich. “Plywood has done the same. Stuff like OSB (oriented strand board) has actually tripled in price.”
Prices peaked in August before creeped back down slightly. But a few days ago, the U.S. released its statistics on new house starts and that has pushed local prices even higher than their August peak.
“The mills have now strengthened their position, prices have shot back up,” said Clarke.
Anyone looking to buy a new home or build one in the coming months can expect to pay more for lumber.
“I’ve been watching what has been happening with the lumber market and we’ve seen that the cost of an average 2,500-square-foot home has gone up anywhere between $10,000 to $30,000,” said Kulmala. “That’s just on that material.”
Labour costs have also risen, driving the price up further.
“I’m starting to think that we’re kind of plateauing at the maximum impact that this is going to have,” said Kulmala. “I think anything more than tha, is not going to allow us to build and things will become so pricey that developers will say, you know what, ‘I can’t afford this now.’”
Back at Lumber World, Clarke had no predictions for the future price of lumber on Vancouver Island.
“Basically, my crystal ball is broken now,” he said. “I haven’t seen anything like this in the 40 years I’ve been doing this. It’s the highest prices I’ve ever seen, absolutely.”
The CEO of the Vancouver Island Construction Association says he predicts prices to remain high well into the future.
“We’re going to stay high for at least another year,” said Kulmala.