Builders to extend new home contracts.

The demand in building throughout Australia has caused huge delays to the building and construction industry, putting pressure on the forever increasing price rises for customers.

Global shortages are having huge impact on the building industry throughout Australia.

Key points:

  • Border closures are making it very difficult for materials to come through from overseas.
  • Opposition leaders want homebuilder schemes to be increased to ensure that the building in history does not collapse.
  • The current government are monitoring schemes and making sure that they meet demands.

Builders across the country have reported lack of materials making it very difficult for anyone to build anything in this current market. Shortage in the pine industry has made it very difficult to move construction along.

Schemes that have been on offer to customers have increased dramatically. Hence putting demand on suppliers to produce products for the construction industry.

Once the contract has been signed by a customer, this project must be started within six months. This enables the customer to receive the government grant schemes.

Delays are putting a huge amount of pressure on these building contracts making it very difficult for customers to receive these government grants schemes.

construction, house, building
Border delays have contributed to the supply of timber throughout the building industry.

“Record level of demand for building materials, as well as the constraints placed due to COVID — restrictions on global freight and shipping containers and on demand globally for materials, particularly for timber — are placing constraints on the detached housing market in Australia,” .

“That same trajectory is playing out globally, it’s a factor in the United States and Canada, Japan, Israel, Scandinavian countries.

“Typically, we would see a domestic home completed within seven months. This year, that’s probably going to stretch out closer to nine months.”

The HIA’s current forecasts suggest 130,000 new homes will be built across the country this year, up from the previous peak of 120,000 in 2018.

“Certainly the six-month timeframe from when the contract is signed to the commencement acts as a significant constraint on the number of projects that will be built this year,” Mr Reardon said.

“Builders certainly need to be cautious in their business planning about what comes out over the course of the next couple of years, because it’s certainly possible to overcommit in a market where there are constraints for the supply of land, labour and lumber.”

Some of the problems with access to timber have been exacerbated by the 2019/20 bushfires, which ripped through some plantations.

80 % of housing timber is sourced within Australia. The remaining 20 % is imported, to cover the surges in demand which are occasionally experienced. 

Applications for HomeBuilder have soared, double what treasury initially forecast when it was announced in the middle of last year hence putting huge pressure on builders.

It is expected it will likely cost the government around $2 billion by the time the program finishes at the end of this month.

Calls for tweak to the scheme.

The federal opposition is suggesting a minor tweak to the scheme, before it finishes, to ensure more projects get Commonwealth support and builders have steady work for a longer period.

“If we’ve got a shortage of timber, and it’s hard to build, or it’s getting more expensive to build, because the price of timber is going up, then there’s a simple practical solution to this,” Shadow Housing Minister Jason Clare said.

“Instead of requiring builders to start construction six months after the contract is signed, extend that to 12 months. This will ease pressure ,also the other solution is to do a contract subject to the supply of material hence making the contract more flexible.

“If [the government] make this tweak, it’ll help the people that are applying for the scheme to comply with in the rules, and it will mean more work for tradies next year as well as this year.”

A spokesperson for Housing Minister Michael Sukkar told the ABC that construction deadlines had already been extended from three to six months since the HomeBuilder program began.Increasing the time frame and making this more flexible will ease the pressure.

“The government believes the present time frames are sufficient,” the spokesperson said.

“However, we remain in constant contact with industry participants and continue to monitor the progress of the program.”

The spokesperson said there were no plans to extend the life of the program beyond the end of March. Giving builders the opportunity to make contracts flexible.

If you would like a quotation on your next building project get in contact with us and we can get you signed up ASAP to secure your place in the building in industry.

Leave a Comment

Your email address will not be published. Required fields are marked *