Aaron Brost, president of the Medicine Hat chapter of the Canadian Home Builders' Association. (Photo Courtesy of Ross Lavigne)

By Chris Brown

Wood woes

Soaring lumber prices pushing new home prices up as well

Sep 24, 2020 | 4:45 PM

MEDICINE HAT, AB – Lumber prices are surging in North America and driving the cost of a new home up with them.

Aaron Brost, president of the Medicine Hat chapter of the Canadian Home Builders’ Association, says mills have struggled to keep up with demand due to increased purchasing in the U.S. and the pandemic and forest fires in the Pacific Northwest.

Brost says the rise in lumber prices is unprecedented.

“Percentage wise, lumber we’re sitting at about 60 per cent and sheet products like OSB we’re in the 200-300 per cent. Dollar-wise we were paying under $10 a sheet of OSB back in January to near $30 now. Where that affects a new home build … anywhere from $3-5,000 depending on the size of the home upwards of that.”

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Brost, the operations manager at Brost Developments, says price and supply of lumber is has stabilized somewhat but doesn’t expect prices to come down anytime soon. But the future of OSB products, which some might call “chipboard” products and are used for floors, roofs and walls of houses, remains a mystery.

“So there may be time where we may be waiting for product to get here and it may still go up in price which is just a little bit scary,” he said.

Another challenge for builders is that contracts are generally signed at a fixed price and for a fixed date and current circumstances make it hard to deliver on what has been promised.

He said that’s a hit that builders will see on their bottom lines.

“And you know we’re always being asked to make houses more affordable and when the products we’re using are on the rise, especially so sharply it makes it difficult for us to deliver that home at an expected price.”

According to Statistics Canada, new home prices rose by 0.5 per cent in August, the largest jump since 2017. It’s also the fourth straight monthly increase after after the average price stayed steady in the spring when the pandemic hit.