Over the past few years, it has become painful for anyone working on their home to look at the cost of lumber.
These days, the cost is falling along with many other commodities – rampant inflation may end or at least give some respite to those struggling with the cost of living.
- Have a question or something to say? Email: [email protected] or join us live now in the comments.
Lumber and framing account for about 10 to 15 percent of the total cost to build a new home, said Mace Mortimer, co-owner of Calgary custom homebuilder Alloy Homes.
“Timber prices are almost 300 percent higher than normal. Now, it has come back in March and April this year. They have softened a bit and come back,” he said.
Many other construction products are still above normal and the shortage of skilled labor is significant. Still, Mortimer thinks the worst of inflation is behind the industry.
“I think it’s peaked,” he said. “And I think it should hold.”
In the United States, new figures were released on Wednesday Show inflation The rate may reach a peak as it fell to 8.5 percent last month from 9.1 percent in June.
Apart from timber, many other commodities such as oil, one of the biggest drivers of inflation, are in decline. A barrel of crude oil is down 20 percent since June.
Copper has fallen nearly 25 percent since March, while many other crops are also falling in value. Both canola and corn have lost 25 percent of their value since May, while wheat is down 40 percent.
“Two or three months ago, we had crop prices at all-time highs or near all-time highs, depending on the crop. We have now seen quite a substantial pullback across the board. [in prices],” said Jonathan Dryzer, a Manitoba-based analyst with Leftfield Commodity Research.
Food prices are falling
According to the United Nations, although food prices are already falling around the world, those changes in prices may take months before they show up in the grocery store.
Real estate prices are a major cause of inflation across the country. Rent rates are still being raised, but housing prices that soared during the pandemic are now sliding in many cities across Canada.
Calgary realtor Hong Wong sold the home to a Vancouver couple about six months ago. Instead of moving, they recently decided to stay in Vancouver and put the property back up for sale. However, during that time, the market cooled and the couple found it tough to repay their money, Wang said.
“We haven’t sold it yet, so it’s the same house [but] A different market,” he said.
All this leads to hope that next week’s Canadian inflation numbers may show signs of improvement. As they look at commodity, employment and real estate data, among other statistics, some economists expect the inflation rate to fall later. 8.1 percent has been touched In June.
Still, at this point, experts say it’s hard to know for sure whether hyperinflation is over.
“The reason why inflation is higher is because energy prices are higher and home ownership costs are higher, and those are two developments that are subject to a lot of uncertainty, particularly energy,” said Trevor Tombe, a university economics professor. Calgary.
“So where we go from here is anyone’s guess.”
Falling commodity and real estate prices should provide some respite for consumers. And if those low prices hold – especially for oil – Tombe expects the inflation rate to return to normal starting next year.