Is There a Shortage of Building Materials in Australia?

Recently there has been a growing worry over the shortage of building materials across Australia. Especially with the building boom that the country is enjoying now, many, especially builders, are concerned about the potential negative effects of this event. Materials such as timber, bricks, and windows are reportedly experiencing a shortage in many areas in Australia, which has been causing delays for renovations and homes. Delays like this are costly and can be an even bigger problem later on.

The construction boom due to the HomeBuilder Grant gave investors and actual buyers a chance to push through their construction plans. There’s been a huge demand from interested clients that resulted in skyrocketing sales and inquiries when it was first announced. The heightened interest from people living in Australia to do home renovations instead of going on vacations, which makes sense because of the situation we are in. But also because of how the pandemic changed everyone’s living conditions, these home renovations will be extremely helpful to make their spaces much more comfortable and fitting to their needs.

The shortage of building materials is causing ongoing construction project delays. For example, a four-bedroom house that would usually take about four months to build is now extending up to 12 months to complete. This is something a lot of builders and investors are complaining about. The housing boom in 2021 was supposed to be an exciting time for builders, but sadly, factors like demands, price increases, and these delays are like a slap in the face.

According to industry experts, builders are hurting from these delays, losing as much as $15,000 per house build. So, what could be causing the shortage?

Increase in demand

The construction materials are all in demand right now due to the effects of lockdown due to the COVID-19 pandemic. People had to stay indoors for longer periods plus the work from home setting gave Australians more time to do home construction and renovation. This was in part, because of the grants provided by the government. The applications closed early this year, but those who were approved for the grant were faced with challenges in finding timber – and if they do find it, they will have to pay more.

2020 bushfires

The Black Summer bush fires that took place last year eliminated a large supply of caused shortage in timber. With Australia’s hardwood and softwood destroyed by the fires, many builders had to look elsewhere. As a result, suppliers had to source materials overseas. Skyrocketing Prices of Lumber in the U.S. and its Effect on the Aussie Market Many builders are complaining about losing money due to the material price increases that were unfortunately not factored into the contracts. The shortage of important building materials will not only cause delays but could potentially put so many of them bankrupt if not addressed correctly. If in case the contractual due dates are not met, liquidated damages would need to be paid.

Builders are also complaining about not being provided with estimated delivery dates because of the lack of supply of raw timbers and laminated veneer lumber. These factors affecting the market are beyond the builders’ control, so the best solution is to work together. Master Builders Association chief executive Rebecca Casson stated that planning is a necessary step to prevent any further problems to escalate. These delays will be inevitable so it is important to discuss alternative time frames to be able to manage orders as efficiently as possible. In addition, the Victorian government also asked the Commissioner for Better Regulation to look into the issue of shortages in construction materials to better address whatever the underlying problems are and at the same time, facilitate additional timber supply.