As the summer period saw heavy rainfall in many areas, sawmill production was reduced due to poorer logging conditions in certain areas. According to published statistics the June 2024 period production rate was at its lowest since May 2020 during the COVID-19 pandemic.
Sawmill contacts comment Ash sales for No. 1 Common and Better grades are good. And those drying and exporting are receiving steady orders. They note that demand is not as favorable for No. 2A. Ash to export markets is doing better than on domestic markets, similar to White Oak, comment some contacts. Inventories are being kept in check as exports are down this year, along with green and kiln dried production.
Demand of the regionally important species Hard Maple has slowed from cabinet manufacturers and component manufacturers. Moreover, demand from other sectors is holding steady, thus keeping supply and demand closely balanced. However, some businesses are still seeking more supplies of the common grades.
Business for Soft Maple is strong for kiln-dried FAS. Prices are thus rising. Contacts note markets are fair for Sap and Better No. 1 Common, but sluggish for Unselected No. 1 Common to weak for No. 2A.
Cherry sales on domestic markets are harder to come by. With new cabinet and case goods producers introducing new lines featuring Cherry, like some furniture manufacturers recently released, this species is seeing more interest from designers, specifiers and consumers. Exports to China, which were keeping this species in demand, have been slowing for some time.
Hardwood residential flooring manufacturers are purchasing Nos. 2A and 3A Oak at a regular pace than in the past months. However, truck trailer flooring plants have reduced their orders. Sawmills were also noted as producing less Nos. 2A and 3A Red Oak and White Oak supplies so the markets were not saturated with it.
Sawmills are producing enough orders of green lumber of Red Oak. Domestic and international demand for kiln-dried Red Oak is fair but keeping pace with supplies of most grades and thicknesses. The upper grades were reported as selling better than the lower grades.
White Oak has been in demand with published figures showing an increase throughout May. Although exports to Europe were reported as having seasonally slowed over the month of July. Kiln-dried availability was still constrained for FAS and for No. 1 Common grades. Contacts note that demand is good for green No. 1 Common and Better White Oak and steady for Nos. 2A and 3A grades. Markets are readily accepting production, but they are not overwhelmed with it.
Poplar production is low and demand for this species is not high. Demand for kiln-dried Poplar is also very low, with prices being firm due to proportionately lower supply.
Contacts state that Chinese demand for Walnut is competitive, and so log demand is growing for this species, as well as to feed other export markets. Demand on the domestic front is good as well.
As economists signal another interest rate cut announcement a few days away from the time of this writing, a survey by Zoocasa suggests the real estate market might still have a muted reaction. The report finds that 58 percent of prospective home buyers said the purchase price is still the most important factor, suggesting that if the Bank of Canada cuts rates again it is unlikely they will consider joining the market.
According to the Canadian Real Estate Association, the average home price fell 1.6 percent year-over-year in June to $696,179, though Ontario and the Northwest Territories are the only two regions with actual price drops.
The second most important factor in the survey with 26.6 percent of respondents was the monthly mortgage payment, followed by home maintenance costs with 8 percent.
Following the Consumer Price Index report in mid-July showing inflation eased to 2.7 percent in June, most economists expect the Bank of Canada to cut interest rates to 4.5 percent on July 24.
But it seems the central bank will need to drop interest rates significantly to have an impact on the housing market. The survey found just 15.1 percent of respondents are waiting for one more cut before entering the market, while 31.6 percent of respondents are waiting for significant interest rate cuts, while 22 percent said they are not planning to enter the market this year.
Interest rates appear to have hit younger Canadians the hardest. Almost 22 percent of baby boomers said rates would not impact their decision to enter the housing market, compared to 12.2 percent of gen X and 8 percent of millennials.
As rates come down and prices remain high, potential homebuyers are divided on when might be the right time to enter the housing market. Just over 40 percent of respondents said they are unsure if now is the right time, while 11.9 percent strongly believe that now’s the time and 12.1 percent strongly disagree.
Projections from the Canadian Real Estate Association predict 472,395 homes will be sold in 2024, which is a 6 percent climb from last year, but below earlier forecasts and far below the 10-year average.
