MASTER BUILDERS EXECUTIVE DIRECTOR
Builders are going off the map and entering unknown territory. The conditions for building a new home have changed dramatically this year and are unlike anything we’ve seen in Western Australia before.
State and federal building grants have been a great success. They have been a game changer for many first homebuyers, helping them to overcome the deposit gap and own their own home sooner. Let’s not forget that at this time last year thousands of builders and tradies were facing ruin as the forward work on their books evaporated when the COVID-19 storm hit us.
If it wasn’t for HomeBuilder then thousands of builders and tradies would have gone under and, now, thanks to the building industry’s economic multiplier effect , the scheme is playing a major role in the economic recovery with every $1 spent in the housing sector equating to $3 in wider economic activity.
HomeBuilder is proving more successful than even the boffins at Treasury predicted but, as in any building boom, it’s putting plenty of pressure on the building supply chain and unfortunately this may have an impact on the completion times for new homes A new Master Builders survey shows 70 per cent of WA building businesses are encountering delays in being able to get tradespeople to their sites due to the huge demand for their services. The holdups mean that an astonishing 92 per cent of respondents are being forced to wait to get bricklayers, carpenters and concreters onto their sites.
Our members pride themselves in delivering projects on time but demand this strong is very tricky to manage and the uniform success of HomeBuilder across the country means we can’t source tradespeople from over east like we have done on previous occasions.
The flood of demand has affected costs, too. Almost 76 per cent of businesses are facing cost increases for tradespeople. For those three trades in highest demand, 88 per cent say the cost has risen.
It’s a similar story for building supplies, 84 per cent of businesses noted shortages of steel products, 70 per cent said timber was an issue and 75 per cent were having trouble getting hold of windows.
Again, we’re seeing a knock-on effect with costs. The strongest price increases are for steel products (10 per cent), roof tiles (9.7 per cent) and some types of wood (9.5 per cent).
Homebuilders are normally pretty adept at managing surges in demand, but WA recorded the most housing approvals of any state or territory in January, up 131.9 per cent compared with the same time last year, which is making it challenging for the supply of key tradespeople and for building product supply chains to keep up. All this means some clients may be waiting longer than usual to get the keys to their new homes.
Rising costs increase the risk of negative cash flow and even potential insolvencies for our members and also raise the risk of small business insolvencies and people missing out on HomeBuilder grants.
In response, Master Builders Australia is working with the Federal Government to release pressure on the supply so the benefits that HomeBuilder brings to homebuyers, the economy and our industry can be maximised. We’re also asking people who are trying to get a new home built this year to be patient and understand that this is not like building a house a few years ago. Or ever before.
Builders would like to move faster through the volume of work, but they need materials and labour, which are not in their control.
We all want to make sure homes are built well, built safely and built on time.
Master Builders WA, 9476 9800 www.mbawa.com