Trade and product shortages amid HomeBuilder Grant-induced building boom 'a perfect storm'

Report courtesy of Rachel McGhee, ABC News.

The HIA says December 2020 has seen 13,527 new homes approved across the country.

Australia’s building sector is bearing the brunt of a “perfect storm” of events, with near-record new home approvals putting intense pressure on supply chains and sparking construction delays.

Key points:

  • More than 93,000 Australians are taking up the federal government’s HomeBuilder grants
  • But new home builders are waiting for months due to construction delays fueled by product and trade shortages
  • The application deadline for the federal government’s HomeBuilder grant ends on April 14

December 2020 has seen 13,527 new homes approved, the Housing Industry Australia (HIA) said, which is a 91.8 per cent jump on the previous month and the second strongest pace of growth in 20 years of records.

In Queensland, the number of new house approvals in the first nine months of this financial year has almost surpassed the state’s total for the previous year.

Queensland Building and Construction Commission (QBCC) figures have shown the 2019-2020 financial year saw 25,695 new house approvals, with the 2020-2021 financial year already at 25,530.

Industry experts put the rapid increase down to a combination of the federal government’s HomeBuilder Grants, a spike in interstate migration, and low interest rates.

While some builders are the busiest they have ever been, they are struggling to keep up with the mammoth demand, and new home builders are being forced to wait months due to construction delays.

Jason Till is the director of a west Brisbane building company.

He said the past few months have been the company’s busiest on record, but selling a record number of homes, while trying to work through product and trade shortages was increasingly difficult.

“It’s all well and good to have the amount of work we have but the next set of challenges is building the house,” he said.

“Bricklayers, plasterers, painters and even roofing contractors would be the most difficult to get.

“We’re finding the jobs are stalling at certain stages, so at the moment there’s actually a big problem with timber supply.

“We’re getting a slab down, but the concrete slab is just sitting there for a number of weeks, sometimes months, before we can even get the frame to site and get the carpenters there to build it.”

Master Builders Queensland (MBQ) deputy chief executive officer Paul Bidwell said the current situation was not quite a building boom, but rather a huge spike in demand over a condensed time period.

“It’s a perfect storm … all those factors coming to us at once, which are just putting enormous demand on supply chains and the available trades,” Mr Bidwell said.

“There’s a lot of conditions that are impacting on the builders now that are beyond their control that they could never have foreseen that this would happen.”

Mr Bidwell said roofers, particularly in the south-east, were hard to come by as they are flat-out repairing roofs after a severe hail storm west of Brisbane in October 2020.

“You cannot get a roofing contractor for love nor money,” he said.

“The insurance builders have hundreds and hundreds of roofs to fix and there is actually a competition going on between the insurance builders and the builders who have signed all those contracts towards the end of last year for HomeBuilder.”

The application deadline for the federal government’s HomeBuilder Grant ends on April 14. Mr Till said he was expecting it to “plateau out into some sort of normality”.

“But there will be congestion in construction — in my opinion — for about 12 months,” Mr Till said.

Mr Bidwell said he was concerned the fallout of the current situation may lead to some builders going broke.

“Builders are unable to deliver the contracts because they can’t, say, get the timber products … the roofing materials, and there will be financial consequences,” Mr Bidwell said.

Mr Bidwell is urging people to be patient in the meantime.

“Consumers have a right to expect that the timeframes will be met, and the price will be met, but because of all the circumstances at play, it’s proving very, very difficult,” he said.

“We just need to get through these next few months hopefully without too much pain for builders and their clients.”

Compare listings