Comments on: Home Builder Profit Margins Increased In Canada and The US Despite The Narrative

By: Yusef

Yusef — Tue, 07 Jun 2022 17:22:11 +0000

In reply to Doomcouver. Home builders are businesses that don't take 10 to 20 years off between cycles, they shift the kind of construction they end up doing. The government is handing them money just in time to create rentals right as yields rise due to falling yields. If you think the government is trying to fix it and not in on the scam, you have no clue how this works.

By: Ron Bruce

Ron Bruce — Tue, 07 Jun 2022 16:03:11 +0000

“Home builder profit margins climbed in Canada and the US. Despite rising material costs, buyers have been willing to absorb the increase”. Let’s all hope that the margins gained are not achieved by watering down Building Codes. A net-zero building creates as much energy as it uses, usually offset by renewable energy sources. The sum of the parts makes the whole, and with current technologies, it’s unlikely most new construction can claim superior efficiency. Banks that approve mortgages might consult a home inspector, but which home inspectors do you believe? High-rise developers are the worst violaters.
Developers like creating the myth of higher energy efficiency when trying to build a structure for less money/investment. The idea is to develop and flip and leave the inefficiencies and errors with the buyer.

By: Doomcouver

Doomcouver — Tue, 07 Jun 2022 03:06:17 +0000

Despite many people’s assertions that values will never crash because builders will stop building, I don’t agree. Maybe over the short-term, but after the initial crash it could become much easier and more profitable to be a builder. Sure the profit per house would be less, but the margin if anything could be much more. Shrinking demand means cheaper materials, cheaper labor, and faster government approvals. As a builder you may have the ability to sell for less than resale homes as well, meaning you get to siphon the demand away from them.

Having a lower input cost per unit means less financial risk as well, and less needed capital to run a construction business. Lower house prices are good for everyone except governments, banks, agents, and people left holding the bag with the current grossly overpriced inventory. A crash is going to be great for first-time/move-up buyers, and builders in general in my opinion.

By: GTA Landlord

GTA Landlord — Tue, 07 Jun 2022 03:03:18 +0000

In reply to Builder Bob. Home builders are the true victim of society. How dare you! LOL! For real, it's wild how many new home buyers are really into the narrative developers scaled their business up to lose money over the past two years, when in reality they price out the home and then slap on their margin *after*

By: Builder Bob

Builder Bob — Tue, 07 Jun 2022 03:01:34 +0000

Really is a shame to not see people mourning the tragedy of developers losing money on bad investments. Look at some of the books of the ones that collapsed. You’ll see things like private construction loans with 20%+ rates, you can’t tell where half the money went, and rejections from the municipality multiple times because they’ve never built a home before and are now mad there’s regulations.

By: Winnie The Pooh

Winnie The Pooh — Tue, 07 Jun 2022 02:52:42 +0000

No way. The government explained all homebuilders are in a sudden rush to lose money as prices climbed to 60%, so they started record building for fun.