Surge in Homebuilding Costs by 51% Deepens Canada's Housing Crisis

Residential construction costs in Canada have surged by 51% since Q1 2020 due to the soaring costs of materials like concrete, steel, and lumber, as per a report by Royal Bank of Canada economists. These rising costs have intensified the country's already serious housing affordability crisis. In addition, shortages in labor and raw materials, high home prices, and an immigration-driven population surge have exacerbated homebuying challenges. The construction industry is facing high wage growth and labor shortages, although these could be mitigated by attracting skilled immigrants. Natural disasters have also disrupted the supply of critical building materials, further increasing prices.