Home Month and Year November 2021 Turbulence in Calgary’s Reno Market

Turbulence in Calgary’s Reno Market

The pandemic and the materials crunch

Photo by Nolan Issac

Calgary construction is always impacted by the economy, consumer trends – and the unexpected.

For at least the past five years or so, reno construction has been booming. Then the sudden materials crunch and the disruptive lockdown of the pandemic happened. And Calgary’s reno sector weathered the storms.

“The demand for renovations has been steadily increasingly over the last five years,” says the respected Danny Ritchie, president and co-owner of the Calgary-based Ultimate Renovations. “But especially in the last two years, as we have begun to see the impact the pandemic has taken on people’s lifestyles, many Calgarians who spent little time at home and thought they would invest in vacation properties or travel are now staying-put, driving momentum into the renovation industry. The last two years have been very busy for us, and we are excited to be growing in both Calgary and Edmonton.”

The unique and challenging aspect of renovations is the unpredictable shifts and changes in consumer trends. Dream kitchens, decadent ensuite spas one season and home offices, home theatres and study nooks the next.

The pandemic lockdowns and the abrupt changes in people’s routine have had a dual impact on the reno sector. Good and bad. “When the pandemic first hit, we knew a lot of people questioned their job security which ultimately caused people who were considering a renovation to re-evaluate their financial priorities,” Ritchie points out.

“However, as people adjusted to new routines and began spending more time at home, the demand for renovations took off. Money that was previously going to be spent on elaborate trips or vacation properties was now being reinvested back into people’s primary residence.

“Of course, the impact of the pandemic not only affected our clients but our trade partners too,” he says. “Masks, distancing and being extra careful. The usual course of business had to adapt as well. With social distancing guidelines, for example, we now have less people on job sites at a given time, which in turn affects how quickly we can renovate a space. Luckily, since we have our own team of in-house trades, the transition was easier to navigate allowing us to minimize the impact on our clients.”

The reno sector, once blitzing with dazzling kitchen cabinets, granite countertops, built-in appliances and space age hood fans is now overwhelmed by the work-from-home scramble of the past two years.

With more and more workers taking up remote positions in a post-COVID world, there’s much demand for live/work-space renovation, whether that’s the transformation of current bedrooms and bonus spaces into offices creating functional spaces that can double for both [live/work] purposes, such as built-in furniture that can be hidden away or used for work and storage, or improving sound insulation in existing walls and areas to create a calm environment for work. The trend shows that people are spending more time and effort in designing a unique working space to maximize their concentration, motivation and productivity.

“With many people working from home more than ever before, we’ve certainly seen an increase in demand for home office spaces,” Ritchie notes. “In some cases, this has led to creating whole new home additions without sacrificing the utility of their current living space. For others, their under-utilized backyards have become the new focal point of their homes. By offering creative solutions for three-season outdoor living spaces, people are choosing to help bridge the gap between the outdoors and their home.

“With everything from outdoor kitchens to fireplaces to entertainment areas with TVs, the appeal of adding an outdoor living space has quickly become one of the most requested Calgary renovations.”

From roof trusses to drywall, siding, shingles, PVC and copper pipe, the sudden 2021 construction materials crunch caught the construction and reno sector off-guard and also translated into spiked costs and job delays.

“After several challenging years of economic downturn with a substantial reduction in work volume, followed by the COVID-19 pandemic, the construction industry was in yet another challenge due to this year’s sudden material prices hike and caused looming lead time and supply availability issues,” say Bill Black, president and COO of the Calgary Construction Association. Our expectation is that there will be volatility for some time in many areas, as supply chains continue to be impacted by the many factors in play. COVID-19 is only part of this and became the straw that broke the camel’s back.

“Many of these issues were in play prior. The real looming issue is labour – both site and office. Supply chains will recover and prices will stabilize (likely not back to where they were) but labour and talent will be the true challenge moving forward. The COVID-19 pandemic has been devastating on the Canadian economy overall. More specifically, the ripple effect the Alberta construction industry, including renos, has suffered is very real. It will take some time to recover.”

During this year’s construction materials crunch, all aspects of construction, including renos, were broadsided and heavily impacted.

High demand for new homes in Alberta, across the country and even globally was the culprit for massive input shortages and bottlenecks for transportation – shipping by rail, truck or sea. A recent survey by the Canadian Home Builders’ Association calculated the added lumber costs alone increased the price of a home by $20,000.

The price hikes and the suddenness of it all was certainly a broadside, particularly the effect on reno construction work in progress.

“The most common in demand materials for renovations for products we carry are doors, mouldings, flooring and exterior decking material, mainly composite. In the last couple of years, we have seen a boom in exterior materials as people were stuck at home,” says the personable Chris Dupont, manager of TimberTown’s Calgary SE location. “This year we have seen that move to the interior of the house with doors, moulding and flooring.

“The high prices in lumber this year caused some people to put off their exterior renovations. Treated lumber, spruce lumber plywood, OSB (Oriented Strand Board, the widely used, versatile structural wood panel) were most affected by the high prices.”

Ritchie acknowledges that the material shortages and fluctuating demand has certainly made sourcing materials a little more challenging for Calgary’s reno sector. “It’s not that lumber, for example, wasn’t available. And we just saw prices sky rocket and only recently return back to baseline levels. Right now, our biggest challenge is sourcing plumbing supplies, windows (as a result of a shortage of silica sand used in the production of the glass itself), MDF building materials and believe it or not, paint!”

The materials crunch is over. While the supply and prices stabilized by early fall, Dupont notes that while the shortages and price hikes were sudden, there had been a Canadian lumber supply problem for a while. “The high demand last year along with a move from people to single family dwellings caused a big shortage in the lumber industry. There was also big demand from the United States for these materials. This year saw the prices collapse and they are back to more historical prices. I believe we will see the prices stay more at historical levels going forward.”

Whether it’s the stay-at-home consumer trends or new home feature extras and lifestyle trends, Danny Ritchie emphasizes that reno success is more, much more, than dazzling new rooms, cabinets, countertops and shimmering tiles. “When it comes to customer satisfaction, the bottom line for us is delivering on our promises,” he says with conviction. “Do what you say you’re going to do, do it on time and within budget. It’s as simple as that!”