Photo: James Bombales
As NAFTA talks continue with no resolution in sight, Canadian housing developers are growing increasingly anxious about what trade tensions could mean for their industry.
Roughly 1 in 3 developers view cross-border trade policy as having a negative impact on their industry, according to a new report from the Altus Group, released today.
“It’s clear from the report that the global development sector is facing an increasingly complex set of challenges and rapid change,” writes Altus Group CEO Bob Courteau, in a statement.
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Although the cost of building materials from the US has yet to drastically change, the heightened level of unpredictability surrounding trade is causing concern in the industry, according to Altus Group senior director David Somerhill.
“What developers are now having to manage is uncertainty around tariffs and the potential cost escalation when it comes to material,” Somerhill tells Livabl.
He explains that, depending on how the talks proceed, developers may have to look to alternative sources for materials.
Other concerns listed in the report? Up to 65 per cent of developers report facing challenges with labour shortages, while 60 per cent are concerned about the development approval process which they consider “complex and protracted.”
“Certainly in the context of southern Ontario and places like Toronto, the uncertainty around the development process is causing some concern,” says Somerhill. “An uncertain development approval process means that developers have to carry holding costs and make educated guesses about construction costs.”
While Somerhill acknowledges that these concerns have existed within the industry for years, he says the added stress of trade talks has made the situation worse for many developers.
“These aren’t new risks, but they are compounding,” he says.