DCN ARCHIVES

March 8, 2005

Cost of new homes on the rise: survey

New homes are likely to cost more over the next year, according to the winter 2004/2005 Pulse survey of new homebuilders and renovators.

About 80 per cent of respondents to the semi-annual survey said they expect costs of serviced lots, raw land and trades and labour to rise over the next year. As a result, most predict higher prices for single-detached homes.

The survey was conducted by the Canadian Home Builders’ Association (CHBA). Results were released at the 32nd national CHBA conference in St. John’s, Nfld.

The survey points to a significant interest in building more energy-efficient and environmentally favourable features into new homes.

Nationally, 29 per cent of builders of new homes plan more energy-efficient features while 23 per cent are planning more environmentally favourable features. These are the changes most cited by almost 50 per cent of the builders who report plans to make significant changes to their homes this year, CHBA said.

In Alberta and Atlantic Canada, 42 per cent of the respondents plan more energy-efficient features, compared with 24 per cent in Ontario, 22 per cent in British Columbia and only 13 per cent in Quebec.

Total housing starts in Canada are forecast to reach 211,000 units, down slightly from the 17-year high of 233,431 started in 2004. Lower starts are predicted in all provinces except Manitoba where they are expected to be marginally higher than in 2004.

Starts in Ontario this year are forecast at 80,000, down from 85,114 in 2004.

About half of the CHBA renovator members in the survey reported higher levels of activity over the last year and many expect further increases in the coming year. About one-quarter of renovators say the underground economy is a critical problem.

Both new homebuilders and renovators report that employment in the industry continued to rise over the last year.

The survey was conducted in December 2004 and January 2005 with the assistance of Canada Mortgage and Housing Corp. and Natural Resources Canada. A total of 325 builders of new homes and renovators responded. Clayton Research tabulated and analyzed the responses.

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