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High Lumber Prices Boosting Home Sales

Realtor Lloyd Francis says that the the high cost of lumber is driving demand for homes on the region’s real estate market. – COURTESY OF LLOYD FRANCIS

By: Colin Farrell Special to the Wreckhouse Weekly

PORT AUX BASQUES – The increased cost of building has some prospective new homeowners choosing to put their construction plans on hold, or to purchase a house instead.

“More people are interested in buying a home, a property that’s already built instead of building,” explained Lloyd Francis, a real estate agent with Royal LePage.

Francis, who serves the Southwest corner of the province from South Branch to Rose Blanche, added that the increased cost of building due to higher cost of lumber has had a boost on the real estate market.

“A lot of people are saving (anywhere) from $80,000 to $100,000,” he said. “If you go buy a $200,000 home, to go build that home today its about $280,000 to $300,000…depending on the size of the home, it’s quite a significant amount of difference.”

While some prospective homeowners have chosen to turn to the real estate market, Francis explains that others have decided to put their plans on hold in hopes there will be a decline in material prices.

“I’ve sold a couple pieces of property, just land where people are not building at this time,” he said. “One person went out and rented, maybe for a year, to see where the cost (is going).”

The increased cost is not only having an impact on consumers, but suppliers are also seeing a significant decrease in the sale of lumber, plywood and aspenite. One businessman shared that increased prices paid to lumber mills and the decline in sales also means reducing the amount of stock kept on hand.

MHA Andrew Parsons (Burgeo – LaPoile) says that the increases in goods and services are being felt throughout Newfoundland and Labrador.

“What you’re seeing is a cause of COVID,” he explained. “Safety measures related to work places led to lumber markets being impacted in reduced production, and then what that leads to is demand exceeding supply.”

Parsons, who also serves as Minister of Industry, Energy and Technology, adds that in 2020, due pandemic-related travel restrictions and the home renovation rebate offered by the provincial government, there was a significant increase in demand for building materials.

He notes that while the increased cost is having an impact in many areas of the province, including at the government level, it isn’t exactly all bad news.

“If there’s a sliver lining for anybody, our saw mills, they’re going to see financial benefits from this,” says Parsons.

“I mean, just last year our province produced over 100 million board feet and about 60 per cent of that is sold to the local market, so obviously with high retail prices and high demand that benefits them.”

For those who are still planning to proceed with any summer renovation projects, Francis shares that there remain options to help to keep costs down, and that includes sourcing local producers.

“I wanna build a shed,” he explains. “ I actually went and got some local sawed lumber, rough lumber, in Codroy Valley to offset some of the cost. It was quite a significant difference. For $1,600 in rough materials, it would be about $4,000 to $4,200 in material from a building supply.”

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