A construction boom inspired by people’s investment in home renovations as opposed to overseas holidays, a global shipping container shortage and the black summer bushfires’ destroyal of softwood plantations has fed demand for materials and generated supply issues, says the Master Builders Association of Victoria.

Michael Ellett, a franchise owner at GJ Gardner Homes in East Gippsland, stated that a four bedroom home that previously required four months to construct was now requiring between six and 12 months to finish—as builders wait for supplies.

Ellett is constructing twice as many houses this year in comparison to last year but will earn the same amount of money.

He stated he is losing funds on all 60 houses his company is constructing because of unforseen material price boosts that were not figured in to customers’ contracts. He’s had to hire fencing, skips and portable toilets for longer timespans.

It’s difficult to explain to folks that during a building boom builders are going out of business, he stated.

Master Builders Association of Victoria chief executive Rebecca Casson stated that delays could not be avoided and must figure into build times.

She urges their members to cooperate with clients to discuss alternate time frames and advises customers to plan for price boosts, she warned.

Raw timber is in especially short supply and builders are not being supplied approximate delivery dates because of suppliers not knowing when stock is on its way. The cost of domestic framing timber has gone up by 20 per cent.

Builders are being required to wait 16 weeks for laminated veneer lumber, which is a high-strength engineered wood product utilised for buildings, up from around a 1½ week wait prior to the pandemic.

Bevan Uren, who owns building and design company BCT Group, which performs home renovations in Melbourne’s inner west, has changed from incorporating timber in frames to steel to dodge cost blowouts and delays. But he said it was growing tougher to source steel because of need, along with other essential building materials.

He said the pandemic had inspired a boom in home renovations, with people spending their vacation money on home improvements.

Housing Industry Australia chief economist Tim Reardon stated that a record 146,000 new detached houses were set to be constructed this year, a 20 per cent increase on previous figures.

He notes the government’s Home Builder Scheme—which provides $25,000 grants for new home builds or significant renovations—low interest rates and a population change to regional areas.

He believes that demand for timber will level in the next half year.

Delivery times of four to 12 weeks are now commonplace, he stated. Builders must manage that scheduling due to constraints on materials.

The Victorian government has requested that the Commissioner for Better Regulation examine the subject of construction material shortages and will take its advice into account.

Assistant federal treasurer Michael Sukkar stated that the Morrison government was exploring how it could address the topic, including facilitating added timber supply by way of sawmills. The supply, he noted, must meet the new demand.


Source: The Age.Com.Au