Building momentum

Home construction sector experiences growth, but supply cost increases are worrisome


Advertise with us

When the pandemic started, Lanny McInnes wasn’t sure what it would all mean for home building in Manitoba.

Read this article for free:


Already have an account? Log in here »

To continue reading, please subscribe with this special offer:

All-Access Digital Subscription

$4.75 per week*

  • Enjoy unlimited reading on
  • Read the E-Edition, our digital replica newspaper
  • Access News Break, our award-winning app
  • Play interactive puzzles

*Pay $19.00 every four weeks. GST will be added to each payment. Subscription can be cancelled anytime.

Hey there, time traveller!
This article was published 19/04/2021 (658 days ago), so information in it may no longer be current.

When the pandemic started, Lanny McInnes wasn’t sure what it would all mean for home building in Manitoba.

“Our industry was very concerned with what the impact was going to be,” said the president and CEO of the Manitoba Home Builders’ Association. “Nobody knew what to expect, and like most other economic sectors, we were preparing ourselves for troubled times.”

For a few months, industry activity slowed significantly. But as the summer went on and fall arrived, a shift in momentum came, and according to McInnes, it hardly slowed down in the first quarter of 2021 or since; if anything, things have sped up as the province enters its second year of pandemic life.

RUTH BONNEVILLE / WINNIPEG FREE PRESS FILES Lanny McInnes, president and CEO of the Manitoba Home Builders’ Association, says at the start of the pandemic last year, home-building activity slowed, but things have sped up as the province entered its second year of pandemic life.

“What we’re seeing is significant activity on new construction and very strong activity on the home renovation side,” McInnes said, saying that in Winnipeg, permits for new builds are up 150 per cent as compared to this time last year. “We’re expecting that to continue.”

According to the most recent seasonally adjusted data from the provincial bureau of statistics, the value of residential building permits issued in February 2021 was $168.5 million, an 8.1 per cent increase over February 2020; about $109 million of that value was in permits for single-family dwellings. As of the end of February 2021, the data showed the total value of residential permits was up 48 per cent as compared to the same period in 2020; on the non-residential side, there was a 32 per cent decrease year-over-year. Permits are considered a leading indicator of economic activity to come.

Nationally, the value of building permits issued reached an all-time single-month high in January of $9.9 billion, a surge driven primarily by a record $7.1 billion value in the residential sector, and in particular, single-family homes. In February, that value dropped, but still remains extremely high at $6.8 billion.

In Manitoba, as elsewhere, McInnes points to low interest and mortgage rates as reasons for the stable activity in renovations and new construction for the industry during unstable times. As well, many people renovating or upgrading their homes haven’t experienced significant negative impact on their income.

Another element is tied to the available housing supply on the resale market, which for the majority of the pandemic has been low, leading to a hugely competitive market where bidding wars have become commonplace and demand is higher than ever. With that reality, McInnes said people who might have looked to buy a resale house in the past could be weighing the option of building instead as a more attractive choice.

The Canadian Press reported Thursday that the hot housing market has begun to experience a slight rebound in supply across the country as sellers look to take advantage of a scenario that favours them: new listings increased by 50 per cent in March compared to March 2021 (see related story, below).

In Manitoba, new MLS listings between April 1 and April 15 were up about 60 per cent compared to the same period last year, said Peter Squire, spokesperson for the Winnipeg Regional Real Estate Board. However, that rebound is likely not strong enough to restore balance to the well-entrenched seller’s market, he said. Despite the increase in new listings, inventory was still down more than 40 per cent, and prices remained high.

A rebound in housing stock would be good for the local economy, McInnes said, as it would create a more balanced and equal market. What really concerns him is the cost of building materials, which throughout the pandemic have skyrocketed, while supply on products such as lumber is low, creating a squeeze on an industry working in high gear to meet consumer demand.

Natural Resources Canada statistics show that between April 2020 and March 2021, the price per thousand board feet of softwood lumber increased by about 200 per cent. Oriented strand board costs about 350 per cent more now than it did in April 2020, the statistics showed.

Those increased costs add tens of thousands of dollars to typical home construction, and the volatility of prices and shortage of supply complicates matters for builders. Canadian Forest Industries magazine concluded in its report from the Montreal Wood Convention in March that there’s “no relief in sight” for the high prices as the repair and remodel market is expected to thrive in 2021.

“What’s happening here is not unique to (Winnipeg or Manitoba),” McInnes said.

“The demand and the (costs) North America-wide is something nobody alive today has ever seen,” he said. “It’s a demand that’s certainly far outpacing supply and it is really having an impact on the costs of construction.”

Ben Waldman

Ben Waldman

Ben Waldman covers a little bit of everything for the Free Press.

Report Error Submit a Tip


Advertise With Us