What Home Builders Can Learn From Supply Chain Issues in 20214 min read

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While it’s no secret that the cost of lumber reached record-highs in 2021, it is important to understand some of the factors that have led to where we are now. It is also key to learn about other areas where builders can counteract these cost and supply challenges going forward. Keep reading to learn more!

Why did the cost of lumber rise to record-highs?

In the summer of 2020, demand for homes in Canada rose sharply and suddenly. As a result of this higher demand, home prices increased and so did the costs of building materials — including lumber. Prices remained high for new homes in early- to- mid-2021, and thus, so did the prices for the lumber needed to build them.

In addition, homeowners started turning to home renovation projects as a way to upgrade their living spaces. More time spent at home and pandemic-era savings were major factors behind this trend; instead of buying new, why not put those savings and extra time towards a home improvement project? However, these home projects often require lumber as well, which only added to the already high demand.

This high demand was not the only reason for the increase in cost — there is also the issue of supply. Many sawmills were either forced to close or scale back operations in 2020 due to health and safety concerns. These shutdowns and disruptions had a major impact on the supply chain, and the effects were still being felt in 2021 by wholesalers, resellers, builders and homeowners.

Overall, the lumber supply and demand issue helped increase the price of lumber to unprecedented highs. It was only recently that the cost of lumber dropped significantly, but it is still not expected to go back down to pre-pandemic levels anytime soon.

What can home builders take away from this?

The rise and fall of lumber prices in Canada should be a cautionary tale for builders. Unexpected increases in building material costs driven by factors out of your control and supply chain interferences of any kind can create cost uncertainties for your projects — disrupting timelines and making it difficult to close on time and on budget. In light of this, going forward, builders and contracts managers should be exploring ways to reduce risk and save on capital costs.

Reliance™ can help builders save on capital costs, maximize profitability & reduce risk.

Rather than allowing new challenges to negatively impact projects, home builders need partners they can rely on who will help them gain a competitive edge wherever they can — that’s where Reliance comes in.

The Reliance Builder Program provides builders and contracts managers with home comfort equipment solutions for their residential developments, big or small. First, builders receive expert consultation on HVAC, water heating, water purification and Smart Home equipment; then, we offer the custom installation solutions* they need to maximize profitability, close on time and build incredible homes.

What’s more, Reliance helps builders and contracts managers find relief from equipment shortages, supply chain issues and more uncertainties. You’ll get the equipment you need when and where you want it without having to go through third-party suppliers.

A partnership with Reliance means that builders can save thousands on capital costs, secure expert installation* and reduce risk. Builders can then generate demand for their new builds by marketing the value and benefits of premium, energy-efficient home comfort equipment and Smart Home products to home buyers.

When your new homeowners move in, they immediately become Reliance rental customers and no longer have to worry about the risks or costs of equipment ownership such as paying for installation, most repairs, dealing with service inconsistencies and more.

LEARN MORE ABOUT THE RELIANCE BUILDER PROGRAM >>

Look out for your bottom line with the Reliance Builder Program.

As one of Canada’s most trusted brands, Reliance Home ComfortTM has helped builders build better homes and look out for their bottom line for decades. We are committed to helping home builders find solutions to successfully navigate new and future challenges in the housing market, including volatility in building material costs.

Click here to learn more about the Reliance Builder Program and to get in contact with one of our representatives today!

Rental benefits including service response time, included repair and replacement costs and buyback are subject to rental program terms and conditions.

*Mechanical equipment installation, available in select regions only. Smart Home equipment will be installed by a Reliance Smart Home Technician. Speak with a Key Account Manager to learn more about installation services and process.