Unfinished homes due to building supply shortage
Work is grinding to a standstill on some construction sites and jobs could be at risk as home builders battle a fast-growing shortage of materials.
Record housing construction, powered by demand for real estate and compounded by Covid, is putting increasing pressure on supplies and prices nationwide of timber, steel, board products, roofing materials, paint, and even nails.
Smaller builders awaiting materials say hundreds of orders are being cancelled, and suppliers are prioritising major clients.
John Hamilton, Master Builders’ Canterbury president, said the crisis was caused by “a perfect storm” and was “not going away soon”.
“We cannot get materials into the country. They go to the biggest markets internationally and a lot of ships don’t even stop here any more.”
He called for New Zealand to boost production of materials and security of supply so it can build the homes needed. Issues include too few timber mills and infrastructure projects using most of the steel, he said.
“The Government wants us to build, but we are not hearing a lot from them about how we are going to negotiate through this. They only seem focussed on Covid.”
Hamilton predicted a “chain reaction” on building sites, including security of unfinished homes and cancelled sub-contracting.
“The follow-on effects could be really devastating.”
Richard Poff of Certified Master Builders says smaller builders are losing out. Photo: Alden Williams/Stuff.
Christchurch couple Warwick and Natalie Edwards broke ground on the house they are building for themselves at Tai Tapu in June. They now cannot see an end in sight.
Warwick Edwards said after they placed a framing order the price was upped by thousands of dollars, and now the order appears to have been cancelled altogether.
“At this stage we’ve got no timber. We feel held to ransom.”
Natalie Edwards said suppliers they had agreements with “aren’t event picking up the phone.”
“We’ve been unable to lock in contracts for all the major components we need to get to the lock-up stage. We think we’ve been dumped.”
Construction management consultant Mike Blackburn said the shortage of products and materials was “literally across the board”.
Unprecedented demand was being exacerbated by global supply chain problems and the Auckland lockdown, he said.
Nationally 47,330 homes were consented in the past year, 25 per cent more than the previous year and almost three times more than a decade ago.
Blackburn estimated that anyone with a site to build on now would not get their keys until mid-2023.
“Everyone is trying to build flat out, but getting hold of stuff is increasingly difficult and contracts are being repriced as the cost of materials goes up.
“It’s almost across every product category. There doesn’t appear to be a single sheet of reinforcing mesh anywhere, so you can’t pour foundations. It’s also any timber products, frame and truss, weatherboards, panel boards, insulation, steel, fence panels, even nails.”
He said while the major home builders seemed to have supplies secured, everyone else was facing major delays, or having to redesign projects.
“Builders cannot do fixed price contracts ... nobody can guarantee what they’ll be paying for building materials.”
Grant Close, owner of hardware and building materials outlet Placemakers Riccarton, said they’d had to cancel some customers’ contracts for timber items.
“We do have some relatively unsatisfied customers, which is not ideal,” he said.
“We are in a very hand-to-mouth situation. The New Zealand building market is running at about 30 per cent-plus more than the country’s manufacturing capacity.
“We cannot take the pressure off because we have enormous trouble betting materials in from overseas.”
Close said it would be next year before supplies improved.
Canterbury Frames and Trusses owner Mark Melbourne said they had halved production and lost 30 contracts.
“We’ve had to push jobs from this year into next year. It’s now nine months’ lead time, for what would normally would be six to eight weeks.
“Of course we have p...ed a lot of people off, but that just can’t be helped if we can’t get the timber.
“Construction in Canterbury is just pumping. But it’s not going to be pumping soon.
“We are going to see builders, plumbers, concreters and electricians with no work – these guys are all going to run out of work because the building process has stopped. There’s going to be people going down the gurgler.”
Housing Minister Megan Woods and Environment Minister David Parker announce a law change that will allow landowners to build up to three storeys without resource consent.
Melbourne said so far his 12-strong workforce was unaffected, “but it we cannot make anything, it will be absolutely affect staff numbers”.
Richard Poff, Canterbury president of the Certified Builders Association, said a “just-in-time” system meant manufacturers and suppliers no longer held large stocks, so were rationing supply and escalating prices.
“If you build 100 cookie-cutter homes a year you’re going to get priority. It’s the smaller guys affected.”
Shortages extended to carpet, building tapes and tapware, he said.