Skyrocketing cost of building materials could stress Victoria real estate market
VICTORIA -- The real estate market on southern Vancouver Island continues to be red hot.
“Condos were up single digits, low single digits,” said David Langlois, president of the Victoria Real Estate Board. “Whereas single family homes in a lot of markets were sort of low double digits.”
Inventory for condos has been holding its own. In contrast, the inventory for those sought-after single-family homes is bleak.
“When we look at the single-family home market, (there’s) very limited inventory and very strong competition for buyers,” said Langlois.
Besides inventory, developers say that the rising cost of building materials may also lead to a rise in costs for home buyers.
“Things are getting almost ridiculous,” said Phil Aitken, a co-owner of Thistle Construction.
“Some products are just getting exponentially more expensive and it’s reaching a point where guys are starting to say, you know, ‘Is there any point in me building this home anymore?’” said Aitken.
Thistle Construction is currently building three homes for clients in Victoria’s Fairfield neighbourhood. In September, they got a quote for lumber for the last home.
“By the time we got around to purchasing the material, it increased in price by about $7,000,” said Aitken.
That increase happened over a three-month period.
General contractors and those who work in sub-trades are also feeling the pinch.
“A 30-day quote is not available anymore,” said Iain Sorrie of Hybrid Plumbing.
For Sorrie, it’s gotten to the point where he can’t even give his clients an accurate estimate due to the rapidly changing costs of materials.
“Suppliers have told us not to give out 30-day quotes (for) the time being because their increases are going to happen quicker than the 30 days expires,” said Sorrie.
Plumbing supplies, lumber, drywall – everything has increased in price, which has many builders questioning if there’s a business case anymore for adding to that new home inventory.
“I think there are lots of opportunities out there at the moment for somebody to start flipping homes,” said Aitken.
“Certainly, finding an older home, new floors, a new kitchen, a coat of paint, some new exterior – you’re still going to pay a bit for materials but it’s not going to be anything like the cost of building a new home.”
The situation could put more pressure on that singe-family home inventory that is slowly becoming more out of reach for many families.
“You know, I feel for the younger generation,” said Aitken. “It’s really quite scary for those people trying to get into their first-time home.”