A LOCAL builder fears having to tear up contracts with people planning their first dream home as a nationwide shortage of materials and border closures cause on-site delays and soaring prices.
Suppliers have warned Sunraysia builders that price hikes of as much as 31 per cent for structural steel, and possibly even more for timber, will kick in from July 1.
It’s the cruel twist in the building boom, where construction costs have spiked as first home-owner grants and low interest rates have sparked a frenzied rush to the property market over the past 12 months.
Builder Josh Dawson, of JD Construction Mildura, this week gave an insight into the sweet-and-sour situation gripping the construction industry.
“The writing was on the wall last year (about the building materials shortage),” Mr Dawson said.
“It’s been our busiest period on record since we started the business nearly 10 years ago, but it’s also been our most challenging.
“We haven’t run out of pine supply yet, but it’s getting very limited.
“We’re also having freight issues with the border closures. Some of our materials come from South Australia, and we’ve had permit issues getting supplies transported here.
“It’s been a headache trying to sort out the logistics of it all.”
Mr Dawson said it would be difficult for builders to absorb the rising cost of building a home without passing it on to their clients.
“It’s a very difficult situation. We’ve locked in a lot of clients through the first home owners’ grant, which had to be signed up by December 30 last year before it was extended for a few months,” he said.
“With those fixed-price contracts, it’s nearly getting to the point where it’s going to be impossible to absorb those increases.
“We been advised by the HIA (Housing Industry Association) and Master Builders (Association) that sometimes it may be in the best interests of both parties to even terminate the contract.
“It’s not a path we want to take, but building a new home has to be viable for both parties.
“If there are delays with supplies or subdivisions getting up and running, then it’s just not possible to absorb those costs.
“It seems like builders everywhere are busy, but it doesn’t always translate into profit at the end of the day.”
He said he had been warned by suppliers of a “second wave” of price increases for building materials in the second half of this year.
“We’ve already been notified by several suppliers of that. Some supplies have already gone up by 37 per cent since the start of the year,” Mr Dawson said.
“Reinforcing steel is right up there and suppliers aren’t even sure of how much pine will go up because of the shortage.”
Asked if there was any inside word to suggest more materials would soon be available to ease the building burden, he said: “No, not really.
“This might be the norm going forward.
“We’re just mindful of not working too far in front of ourselves because we can’t lock in anything now if we can’t start work until six months down the track.”
