Richmond builder Gary Lan has been looking forward to constructing a home where he and his wife could enjoy their retirement.
Lan started building his 4,000-square-foot home last November in Vancouver and remembered an eight feet by four feet piece of plywood costing around $18.
However, he was shocked recently to find the same pieces of wood now being sold for $68.
The price hikes aren't just limited to lumber, according to Lan, and have spread to other products which are essential to building a house, such as two-by-fours.
"The price of two-by-fours have doubled since last year. It cost around $5.70 for each, now it’s $11. It takes a lot of two-by-fours to build a house,” he said.
"I originally planned to spend around $70,000 on lumber and building materials, but the unprecedented volatility and soaring prices drove up the cost to $110,000," said Lan.
Some homeowners, added Lan, might decide to put the house on hold to see whether the price will return to normal.
But he decided to forge ahead, taking the view that the price will continue to climb.
"I couldn't wait anymore, which would blow away more money in the end,” said Lan.
What's even worse is that a few of Lan's friends, who are also homebuilders, had to halt construction because there has been a severe shortage of building supplies.
"You are not getting what you want even if you have money. You have to wait patiently. That's how crazy and ludicrous the lumber market is right now," said Lan.
Lan said he feels extremely relieved to see his home construction project coming to an end this month.
Jackie Zang, founder of Richmond Pallet Picker Corporation, said “lumbermania” is a pretty straightforward story about the booming demand and tight supply in the housing construction and renovation markets.
When the pandemic first hit North America last spring, many sawmills decided to shut down entirely because they assumed that the demand for their business might fall, said Zang.
However, things appeared to move in the opposite direction.
"With the pandemic shutdowns taking place across the country, more people who work from home decided to purchase bigger places to live or are planning to tackle home improvements and remodels. They think now is the perfect time to do this since they have nowhere else to go,” added Zang.
The soaring prices for lumber is also expected to have a knock-on effect on the actual prices of new houses.
Richmondite Victor Chow, who has 30 years' experience as a builder, said the increased costs from the lumber would eventually get passed along to consumers, which might price specific clients out of the market entirely.
"I have never seen anything like this. For example, if you plan to build a 3,000 square feet single-detached house, the record-high lumber prices will add around $150,000 to new home building cost," said Chow.
"The homeowner needs to spend an additional 20 per cent or 30 per cent. Who is still willing to build a home right now? Maybe only millionaires would say yes. The situation is going to affect all of us in this chain."
