The lower mainland of BC has too many builders. HPO (Home Owner Protection Office) reports as of September 2015 that 4,313 builders are registered and in good standing in the Lower Mainland, Fraser Valley and Sunshine Coast. But in that same area less than 4,000 building permits for single family dwellings and semi-detached duplexes were issued per city and regional district stats for 2013. (Not including multifamily units)

Builders Registered with HPO

These builders have paid their bond and annual renewals to be registered with HPO. Some are good builders and good business people. Others build a few homes per year, and a few are larger subdivision builders. But the majority of these approved builders build one home or even none per year. Tough to make a living.

The business practices of this group range from really good to really bad. A study of contractors across Canada shows that 65% of these builders go out of business within 5 years. And 34% of this group goes out of business in their first year.

Protecting the Buyers

Just like on TV, I recently had a call from a lady in tears because the builder she hired to build her custom home is getting near the completion stage, but took her money, left $80,000 in unpaid trades and suppliers, and is going out of business, and not completing her home. Leaving her with huge stress, incomplete warranty, and escalated costs.

The good news is that HPO is requiring minimum standards of training focussed around construction knowledge in order to become or continue to be a builder. As well companies with good business processes which utilize best practices for construction and sophisticated marketing are expanding and gaining market share. These two forces will put pressure of those mediocre builders who will need to join the leaders, become niche specialists, or go out of business.