A worldwide shortage of building materials is hitting home already, with worse to come say Bega Valley construction companies.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
According to CoreLogic the demand for building has driven up a 1.4 per cent quarterly increase in Australia's housing construction costs in the three months until June 2021.
There are no signs of things slowing down either. This year has seen a spike in Australian domestic builds, pinned as a flow on effect from the Morrison government's HomeBuilder program and similar stimulus packages being implemented around the world.
Global prices for materials such as timber have skyrocketed, timber mills in Australia and internationally are struggling to keep up with demand.
Although a number Bega Valley builders have reported that the shortages in materials will hit hardest in the coming months, they have already started to feel the sting.
Jarrah Clifton from Clifton and Russell Constructions, said the shortages are causing particular issues for fixed-term contracts that were signed months ago.
"The shortage of building materials is giving us a lot of big problems because we had huge price rises for jobs that we've already had on the go. We're getting price rises every single month which we've just got to wear at the moment," he said.
Clifton and Russell mainly does domestic builds, which are not just costing more but also taking significantly longer to complete, leaving clients waiting for their homes to be finished.
"It used to take us about six to eight months for a big one, but now the timeframes are blowing out due to the demand for timber, we just can't get it."
Mr Clifton said they recently had to wait 12 weeks to receive an order for a timber flooring system on a contract that was only six months to begin with.
"With the ones we are doing at the moment those prices are slowly rising, but the new builds could be 20 to 30 per cent dearer than what they were six months ago," said Mr Clifton.
Leserbuild project manager Scott Bignold said the company faced similar issues with contracts that were signed a number of months ago.
Those additional costs due to an increase in the prices of materials must be worn by the company.
"It just comes out of the profit, if the profit is there in the first place," Mr Bignold said.
Leserbuild takes on a lot of large commercial builds as well as a couple of domestic properties throughout the year. Mr Bignold said he had experienced issues with sourcing steel in the last few months and said he was starting to notice issues with timber products now.
"We are trying to get even just small amounts of timber and that's been a hassle. We're having to order two months in advance just to get a pack of timber."
Although both builders said their clients had been particularly understanding when it comes to delays in their projects, there was extra pressure for builders as some people waiting for their new homes were impacted by the rental housing crisis in the area.
READ ALSO:
"It's pretty hard for them to wait, because it could be an extra few months to have their house finished when they've got no rentals available or they're worried they might get kicked out of their rental," said Mr Bignold.
Tony Rettke from Rettke Builders said the shortages have really just started to hit home now.
He said people in the region were being heavily impacted as many had been waiting for extensive periods already due to the demand for builders and tradespeople following the Tathra and the Black Summer bushfires.
The Tathra-based builder said there were homes put on hold to accommodate builds for those who had lost their homes in the Tathra fires, and now some individuals were having to wait even longer due to material shortages.
"Some jobs are stopped now due to shortage of materials, I can't get roof trusses for example, and it's only going to get worse," he said.
"Everyone's busy, you can't get tradesmen and builders, sometime I get phone calls from people who say they've tried several builders who don't even ring back. It's a bit rude, but I kind of understand why they might not be getting back to people."
Rettke Builders mainly focuses on architecturally designed homes and puts its energy into a few builds each year. Mr Rettke said where it would usually take six to 12 months for a domestic build, he's envisaging waits of 12 to 18 months for new builds.
All three builders said they would have to bear the costs of fixed-term contracts which were priced before the shortages really started to take hold.
While some of the builders mentioned trying to look into future clauses and conditions on contracts that take into consideration the heavily fluctuating prices, it was extremely difficult to implement in practice.
Mr Rettke said with many domestic builds, contracts are locked in with a bank and in order for those contracts to be signed, they must be fixed.
Mr Bignold said it was a similar process in the case of commercial builds, which are often priced before contracts are signed.