While strong demand earlier this year gave many builders confidence that the market would be able to absorb cost increases, six successive interest rate hikes have put the brakes on deals for space and construction intentions.

“Residential and commercial [builders] have paused projects,” said Ben Taddei, chief operating officer with the Conwest Group, which is both a developer and also operates a contracting division.

Contracting activity has slowed significantly this year with housing starts in Metro Vancouver through September down 10 per cent versus last year with further slowing expected.

“So what does that mean?” Taddei asked. “Some prices have to come down.”

This is what Josh Gaglardi of Orion Construction Corp. of Langley is starting to see. Speaking with Western Investor in July, he said the cost of some materials had doubled since 2020. Orion is now expecting prices to pull back by an average of 10 to 12 per cent over the next year.

“We’re starting to see a very, very slow settling of construction costs,” he told NAIOP. “Right now we’re getting trades calling us more often asking what projects we have going on, do you have work, whereas two years ago you had to call those trades and say, ‘Hey, do you want to work for me? Can you work for me?’”

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