From Business in Vancouver via Jak King:
Is this a textbook example of Adam Smith’s dictum, or are there other factors?
In Vancouver, for example, Altus Group says construction costs for a higher-quality four-storey, wood-frame condo building would peak at $250 per square foot. This compares with $195 per square foot in Toronto and $175 or less in nearly every other city in the country.
The Altus cost estimates are for hard construction costs only and do not include land values, or any of the soft costs, including profit, associated with completing a project. Altus did not provide an explanation why construction costs would vary from one jurisdiction to another.
But the difference is less pronounced in commercial construction:
For example, the hard construction cost for a Class A five-to-30 storey office building in Vancouver ranges from $270 to $340 per square foot. This compares with $220 to $290 per square foot in Calgary and Edmonton. The price for such an office building in Toronto ranges from $210 to $315 per square foot, according to Altus.
It’s no wonder people are having such trouble finding tradesmen for small jobs. We finally found a guy in his 70s to pour a bit of concrete last year.
Over the rule of the past government trades programs saw their funding slashed. VCC for instance used to have a number of vocational trades, if it wasn’t related to hospitality or medical then the gov didn’t want to fund it.
Now that we’re in the era of peak boomer retirement we’re finding we have skyrocketing trades costs and virtually no availability – wonder how that happened?
Not to mention cost of living here, If you are a skilled tradesperson you have lots of options outside the Lower Mainland.
UBC has repeatedly had to give it’s unionized trades people market increases to keep them around. Why work on a (relatively) remote campus (with a long commute) when you can make much better money building condos.
The huge volume of construction currently seen in Greater Vancouver probably plays a part. The number of units under construction is 40,000 – more than double the average in the past 40 years (http://housing-analysis.blogspot.ca/ has a chart showing the dramatic increase). Over that period, units under construction in Greater Vancouver only briefly passed 25,000 in 2008-2009 – and then again in 2016 – and has risen dramatically in two years.
Part of the explanation is the really big projects, with multiple towers and large numbers of units all building at the same time, particularly in Burnaby and Richmond. There are also a wide range of projects in Vancouver that don’t attract the same attention, but add up to a significant number of units. There are five rental towers all building simultaneously in four schemes near Davie and Denman for example.