Today, the cost of residential construction is 81-per-cent higher across Canada’s major cities compared to 2017 and more than double – up 107 per cent – in the Toronto region, according to Statscan data.
And part of that's inflation, and the rest of it is . . . what? Higher property costs for unbuilt land? New environmental regulations? Increased municipal permitting and red tape? Companies driving the expenses up by building large detached houses no one can afford? A knock-on effect from industries producing building supplies?
Are the costs being driven up at a similar rate outside major cities?
Thing is, there's still what you might call a stagnation space between "line goes up" and "must declare bankruptcy", one in which even a publically traded company can ride for a year or so without the shareholders getting too anxious while they wait for the line to start going up again. Yes, you'll get the occasional company cratering by doubling down on a bad decision made in pursuit of line-goes-up, but 240 of them suggests that there's something more going on here.
It may be that the issue is the "higher borrowing costs" that the article alludes to, and the way these companies have been conditioned to do business causes them to overextend themselves by borrowing too much. That means that the ones that stay afloat will be the ones that can correctly balance the risks inherent in taking out loans.