Building in Fourth Quarter 2023
The weather isn’t the only type of climate that is cooling in Southern Ontario lately. Recent interest hikes geared towards curbing inflation rates have seen a slowing in the rate of new projects starting in our industry, although the pace of starts for new detached home builds is still about 7.4% higher on average than the 5-year seasonally adjusted average, but still down double-digit percentages from six months ago. “Building will come under more pressure ahead, with demand being thwarted by high interest rates,” Katherine Judge, an economist at CIBC Capital Markets, said regarding the recent data. This affects all areas of residential construction, from new home starts to condo development, to renovations. The cost of borrowing money, coupled with the FUD Factor (fear, uncertainty, and doubt) surrounding the futures of markets in general, have all caused a noticeable slowing in the number of new job opportunities for builders in both the Region and nationwide as consumers are holding on to their financial capital with a strong grip. Contractors are bidding less and seeing their conversion rates lowering as these factors permeate the market and trickle down to their bottoms lines.
But it is not all doom and gloom. Silver-linings can be found anywhere, if you’re willing to look for them. A slowing down from the highs that were seen in the pandemic-era building climate can give time for contractors to evaluate their processes, refine their sales and marketing strategies, and look for areas where fat can be trimmed away. Leaner times call for greater efficiency and, at the end of the day, greater competition for a smaller number of clients is a good thing for the consumer. This also allows those who are willing to tighten their belts and work leaner, greener, and meaner for their clients the opportunity to learn how to operate in a manner that will not only serve to strengthen their resolve and their standard operating procedures, but to learn lessons that will have a positive impact on operations and far-reaching implications when the climate inevitably heats up again.
To find out what some of your home renovation options may be, even on a lean budget, give us a call today! We’re here to help you give yourself the home you’ve always dreamed of!
-Dave McManus, Project Coordinator, SteveBuilt, Inc.