Local builders hit by spiralling materials costs
House builders across Corangamite are being crushed by an avalanche of significant price increases for essential construction materials, local Federal Member Libby Coker MP said today.
“Material supply issues and extreme price hikes across all trades is leaving builders with the fall out. They’re wearing the costs in order to continue trading and complete projects, but many are close to going broke as a result,” Ms Coker said.
“Significant new price hikes are coming in February and March, on top of similarly high price jumps last October and last June. The cumulative impacts are seeing some types of timber building materials increase by at least 30 to 40 percent in less than a year.”
Local suppliers are quoting February-March 2022 price rises, such as:
- Engineered wood joist (i-joist) – up 15% to 25%
- Structural plywood (LVL) – up 20%
- Plywood - 10 % (some imported ply by 15%) (also increased by 10% in July)
- Medium-density fibreboard (MDF) products – up to 15%
- Structure timber (Light Organic Solvent Preservative treated) – up 10%
- Extreme posts – up 10% to 12%
- Fencing timbers – up 15%
- Oriented Strand Board (OSB) bracing - up to 20 %
- Primed pine - up to 10% (also increased 10% in July)
- Door frames, sills - up to 10 %
- Doors – up to 15%
- Decking Australian species - up to 7.5 % (also increased 10% in Aug)
- Particleboard flooring - up 5 to 8%
- Cypress – up to 15%
“Materials like steel and concrete have also been increasing by a minimum of 6 to 8 percent every two-to-three months, often with only a few weeks’ notice. Steel is up 45 percent, concrete 50 percent and timber 70-90 percent for some products,” Ms Coker said.
“It’s no wonder that the price of an entry-level house in new estates went up by about $38,000 in the second half of last year.
“Builders are being wedged financially. A typical small custom builder might build three to four new homes or large extensions a year. Builders are required by law to lock themselves into fixed price contracts for those builds, whereas the prices for materials and trade suppliers are skyrocketing.
“It’s time the Mr Morrison and Mr Frydenberg stopped telling everyone how good the economy is and spend time looking around at what’s actually happening.
“Mr Morrison has been out promoting the first home buyers scheme, and pushing the construction industry to hold up the economy during the pandemic, but the small custom residential builders are the collateral damage.
“As too are the home buyers. They’re paying exorbitant prices due to the Government over-stoking the market at a time when there’s significant supply chain and timber product shortages.”
Timber shortage needs long-term solution
“Part of the problem is a shortage of Australian plantation timber,” Ms Coker said.
“A recent joint report by Master Builders Australia and the Australian Forest Products Association says Australia’s plantation timber shortage will escalate.
“By 2035 the nation will be short 250,000 house frames – that’s the equivalent of the housing stock in the cities of Greater Geelong and Newcastle combined.
“And it’s not like the Government wasn’t warned this crisis was coming.
“In the short-term, to help alleviate the current problem, sawmills must be given extra processing opportunities by allowing them to transport logs from further afield.
“In the longer-term, we must ensure there is timber plantation stock to meet future housing demand.
“The Morrison-Joyce Government mustn’t drag its feet any longer. We need a national coordinated plan to mitigate against this growing timber supply and escalating cost crisis.”Share Tweet