Shortages and the rising costs of labour and serviced lots are the main concerns of Canadian home builders, says the most recent edition of the Pulse survey, a semi-annual poll conducted for the Canadian Home Builders' Association. The same issues topped the list of concerns last winter, as well as in the summer 2005 issue.
In fact, rising costs have been a concern for most of the years that the survey has been conducted. The most recent Pulse survey, conducted in June and July of this year, was the 38th edition. It provides a snapshot of the Canadian homebuilding industry, going beyond housing starts and average price statistics.
One-third of builders expect shortages and the associated rising costs of serviced lots to be critical problems during the next 12 months, says the survey. A lack of tradespeople and labour is a concern for 22 per cent of those surveyed. Framers, carpenters and drywallers are especially hard to find, report the builders.
With the labour shortages, it's not surprising that employment in the industry continues to rise. About one-third of builders say that full-time employment is up, while 10 per cent reported a decline. Part-time employment is also higher than last year.
A quarter of the builders say that development charges, typically levied by the local municipality and school boards, are a critical problem. Sixteen per cent are worried about more onerous building code requirements being enacted. In Ontario, 25 per cent of builders surveyed are concerned about a private members' bill that would make fire sprinklers mandatory in all new homes.
Other issues include insurance rates/premiums, theft of materials from building sites, and the impact of the underground economy (although fewer builders mentioned that as an issue in the most recent poll).
The builders surveyed predict that housing starts will drop to about 217,000 units this year, down from the 225,481 in 2005. Booming Alberta is the only region where the builders expect an increase in starts in 2006 and 2007.
The builders are optimistic about the renovation market, however. Ninety-one per cent predict that renovation activity will stay the same or increase during the next 12 months.
The average renovation contract is $60,000, and it takes nine weeks to complete the average project. The largest contracts are being awarded in -- no surprise -- Alberta, while the smallest are in Quebec. About one-third of the renovation contracts are valued at more than $100,000 and another third less than $25,000.
With new home prices rising across the country, builders are shifting some of their marketing focus away from first-time buyers and toward the move-down market, says the survey. About two-thirds of builders have made move-up builders their primary target market. More than half are building tract/semi-custom homes.
The Pulse survey says that traffic in sales offices is down, compared to last year, in Ontario, Atlantic Canada and Quebec. It's up in Manitoba, Saskatchewan and Alberta, and in B.C. first-time buyer traffic was down while the tract/semi-custom activity in the move-up market was up.
The average new Canadian home has about 2,000 square feet of living space, on a 50-foot-wide by 110-foot-deep lot. The largest homes are being built in B.C., and the smallest in Quebec.
The survey says it's taking longer to build homes in most parts of the country than it did last year. The average construction time is 22 weeks, up from 20 weeks in last year's summer survey, and 15 weeks five years ago. Perhaps reflecting the size of the homes, the fastest completion times are in Quebec (12 weeks) and the slowest are in B.C. (29 weeks).
The Pulse survey is conducted for the home builders' association by Clayton Research, with financial assistance from Canada Mortgage and Housing Corp. and Natural Resources Canada. Conducted in June and July, the survey included responses from 310 builders and renovators.
