Home builder industry crisis exposed
Queensland's building industry is in crisis with homeowners and renovators facing cost blowouts of $30,000 and tradies being held to ransom in the shockwave of the surprise Covid-boom.
Building materials have skyrocketed in price, with the average house build now estimated to cost at least an extra 10 per cent.
Industry groups fear a wave of mental breakdowns and bankruptcies as delays and international supply costs force mum and dad operators to the wall, forced to absorb the costs and delays in the "profitless boom" while clients are left without the homes they were promised.
Insiders are warning the industry is "unhealthy" and anyone planning a build or a renovation should wait.
A combination of the runaway success of Home builder - which was tipped to attract 27,000 applications but received more than 121,000 nationally; hail damage repairs, interstate Covid refugees, an international construction boom and even a shortage of shipping containers are forcing prices sky high.
Roofs that would normally take eight to 10 days to deliver have blown out to four or five months, the Housing Industry Association says.
Everything from steel reinforcing for concrete slabs to timber for framing and cladding, flooring, roofing, doors and fittings have soared in price, they say, and are sometimes taking months longer to arrive.
While domestic mills are working flat out to supply timber, 30 per cent still needs to be imported and is hostage to a booming American housing market, where construction has doubled.
Added to a shortage of international shipping containers stranded in different corners of the world and the soaring demand for construction labour, builders say anyone wanting to build or renovate faces cost increases and material delays, with one major supplier urging would-be renovators or builders to hold off.
In letters to suppliers, manufacturers say they have no choice but pass on the cost blowouts after being slugged with raw material price rises of 50 per cent in 10 months and international freight costs doubling as well.
In one example, a window manufacturer ordered a component from New Zealand expecting it to arrive in a week. It took a month, with the only shipping available going from New Zealand to Sydney via Singapore, HIA Queensland regional executive director Michael Roberts said.
So crushing has the pressure on builders become, regulator the Queensland Building and Construction Commission website carries the contact number for suicide prevention charity Lifeline.
Master Builders housing chairman Steve Havas urged homeowners to be patient with their builders caught in "the perfect storm".
"We've experienced massive cost increases in materials this year" Mr Havas said.
"They are not currently priced into building contracts or they are being gradually fed into building contracts. Builders have little or no margin left at the end of projects to pay wages or fix building costs.
"We've had timber go up 30 per cent and still going. We've had floor structures go up 18 per cent and still going. Steel was up 20 per cent, 30 per cent or more.
"Roofing materials, plasterboard, windows, cladding are all increasing in price. On a daily basis its hard to keep track of the amount of increases we are experiencing for work that is under construction let alone what we are trying to price for the future.
"There are also delays on the supply of materials.
"Where you would normally order something and maybe have a two to four-week lead time, frames and trusses are out to 10 to 12 weeks, floor structures out to eight to 10 weeks.
"So you've got buildings sitting there that can't be built because we don't have the materials to build them."
"That's the position we're in. We're doing our best.
"It's a national issue."
Mr Havas said prices would rise across the industry.
"Builders have to increase their prices to match both what they are paying now and what they might have to pay in the future," Mr Havas said.
"The cost of construction from a consumer perspective is going to rise."
Iconic southeast Queensland supplier Bretts - which was established in 1912 in Windsor - has been fielding desperate pleas from builders in Queensland and interstate begging for material.
Chairman Bill Nutting said the firm, which has an annual turnover of $100m would normally produce frames and trusses for 1000 a year. Last week alone, they turned away requests for 600.
He said suppliers were doing what they could but labour shortages were hurting too.
He said he was hearing daily stories of builders receiving a call from a roofing contractor due to start work the next day demanding an increase of $5000 to do the job or they wouldn't turn up.
"The market is so hot they could walk next door and get the money," Mr Nutting said.
"This is going to go for 12 or 18 months.
"The prices are going to keep going north and there's going to be delays. It's inevitable.
"It's very unhealthy. We'd much rather see this play out over two years, not over 12 months."
The Queensland Building and Construction Commission is urging homeowners to be patient, warning of mental health pressures on builders.
"The Queensland residential construction industry is experiencing an Australia-wide shortage of building materials and skilled tradespeople, resulting in delays in the building process," the regulator says the front page of its website.
"These shortages are due to market forces amplified by the COVID-19 pandemic impacting everyone in the supply chain, from suppliers and builders to subcontractors, employees, and consumers.
"We expect it will take some time for the industry to get back to its usual supply and operating rhythm.
"The QBCC is working together with the Queensland Government and industry organisations such as Master Builders Queensland and the Housing Industry Association to do as much as possible to address the current situation and keep you informed of delays and shortages.
"These delays and their flow-on effects can have a significant personal impact on your finances and professional confidence. For support, please reach out to organisations that are there to help, like Mates in Construction (1300 642 111) and Lifeline (13 11 14)."
CARPORT COST DOUBLES BUT RENOVATOR HAPPY TO PRESS AHEAD
Paul Arnaud started planning his new carport last year before heading into construction earlier this year.
His initial quote from September came in at around $30,000 to $35,000 but by the time it was finished, the final costs were around double this sitting at $60,000.
A builder friend of Mr Arnaud's told him demand was so high that many builders could basically charge whatever they wanted.
"In his personal experience, he's almost turning work away and deliberately over-quoting to say that he's got too much on, and even if they do accept his quote he won't be able to see them for six to eight months," he said.
Mr Arnaud, 53, from Kedron admitted the increase in demand that caused higher costs was a "vicious cycle" but said he wasn't put off by it.
"It wouldn't deter me, if there was another job that I wanted to do I would still press ahead and do it," he said.
Originally published as Held to ransom, 50 per cent cost hikes: Home builder industry crisis exposed