CHBA — Home-builder sentiment has reached a new high in Q4 2021 despite a 13% increase in project costs, according to the Canadian Home Builders’ Association (CHBA).
The quarter saw record highs for the indices of confidence in the single-family (84.9) and the multi-family (87.1) segments, CHBA said.
“Throughout , the quarter-to-quarter sentiment was declining due to a number of uncertainties in the housing market (such as supply chain disruptions, material costs, changes to the stress test, and another wave of COVID-19). But now we can see that in Q4 sentiment was on the rise again as some of the uncertainties that were present throughout the year were reduced and homebuyer activity was still strong,” CHBA said.
Stronger builder confidence coincided with Canada’s robust housing starts and building permit performances over the past few months, CHBA added.
“In November 2021, we saw the first month-over-month [starts] increase for the year, rising by 26% between October and November,” CHBA said. “Year-over-year, building permits have increased by 17%, rising by 12% on the single-family side and by 21% on the multi-family side.”
However, steadily rising material costs and supply-chain issues remain formidable challenges. CHBA estimated that the overall construction price on a 2,484sq ft home is now more than $68,000 per unit.
“The average delay is up three weeks since Q1 2021, confirming that this continues to be a major challenge for the industry,” CHBA said. “In addition to this, 63% of builders indicated that the overall supply of developed lots in their area is low to very low, emphasizing the need for all levels of government to take rapid action to enable more housing supply to come online.”
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