FBR General Discussion, page-828

Timber shortages!!!

Global shortages, HomeBuilder demand causing building delays and price rises

A sharp increase in global demand for building products during the COVID-19 pandemic has caused price rises and delays on Australian construction sites and is prompting calls for changes to the federal government's HomeBuilder scheme.


Builders across the country have reported trouble in accessing items like timber for house frames, as more Australians decide to build detached homes.A contributing factor behind that construction boom in Australia has been the HomeBuilder scheme, which offers owners grants worth tens of thousands of dollars to either build new homes or substantially renovate their existing properties.


One of the key elements of HomeBuilder is that construction on eligible projects must begin within six months of contracts being signed.When that deadline is placed on sites across the country, there is a concern some projects may miss out on government support due to delays.


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," Housing Industry Association chief economist Tim Reardon told the ABC."That same trajectory is playing out globally, it's a factor in the United States and Canada, Japan, Israel, Scandinavian countries.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 2017."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.Eighty per cent of housing timber is sourced within Australia. The remaining 20 per cent 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.It is expected it will likely cost the government around $2 billion by the time the program finishes at the end of this month.