The Effects of Reduced Lumber Prices on Canada’s Real Estate Market
1 min read
As the world slowly returns to a new normal, so does the price of lumber. Over the past two years, the price of lumber, steel, and even concrete hit record highs, resulting in major delays for many real estate projects across the country. The price of lumber can play a role in the cost of building new homes and, as a result, affects the home price.
In 2020, there was a significant increase in home renovations and DIY projects being done, resulting in more people being in the market for lumber. Lumber prices are commonly measured in USD dollars per thousand board feet. In 2020 that price was USD $400 per thousand board feet, and in 2021, the price could be seen as high as USD $1700 per thousand board feet. At the end of 2022, we can see the price has fallen back to USD $420 per thousand board feet.
Since this massive supply chain disruption, lumber has fallen the fastest in price due to the decrease in people taking up renovations and DIY projects. With the reduction of people interested in purchasing lumber, production is now able to catch up with demand, allowing the price to stabilize and be accessible.
Over the next year, it is estimated that the price will fluctuate around US$400 to US$600 per thousand board feet.
References
Grant, C. (2022, September 2). Are lumber prices falling and how low will they go? canadianrealestatemagazine. Retrieved January 20, 2023, from https://www.canadianrealestatemagazine.ca/news/are-lumber-prices-falling-and-how-low-will-they-go-335196.aspx
JLL. (2021, September 8). Are volatile lumber prices slowing Mass Timber's rise? Commercial real estate. Retrieved January 20, 2023, from https://www.jll.ca/en/trends-and-insights/cities/are-volatile-lumber-prices-slowing-mass-timbers-rise
Trading Economics. (n.d.). Lumber2022 data - 1978-2021 historical - 2023 forecast - price - quote - chart. Lumber - 2022 Data - 1978-2021 Historical - 2023 Forecast - Price - Quote - Chart. Retrieved January 20, 2023, from https://tradingeconomics.com/commodity/lumber
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