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Home Builders To Expect Delays & Price Rises

The construction industry has been facing workforce shortages for 10 years and this is looking likely to continue.

Building material shortages Victoria

Budding home owners across regional Victoria are facing further delays in the construction of their dream houses due to supply chain disruptions and worker shortages.

Builders are waiting about nine months for trusses and up to 16 weeks for laminated veneer lumber (LVL), one of the most widely used engineered wood products, according to Master Builders Victoria (MBV).

Stuart Allan, chair of MBV's country sector committee, said these shortages were likely to continue into next year.

"It's widespread, but if we're just talking trusses, they're used right throughout the industry," he said.

"We are talking with designers and engineers to try and get LVL beams as an alternative to pitch a roof with, but there is a demand for those beams as well and the supply of those beams comes from overseas.

"So now there is a shortage of those as well as; there is demand from a lot of countries [for the material]."

Key points

  • Building material shortages, due to supply chain disruptions, are likely to continue into 2023
  • The construction industry has been facing workforce shortages for 10 years
  • The building industry contributes more than 46 per cent of Victoria's tax revenue

Graeme Pilcher, the managing director of Pilcher Builders in Bendigo, said costs had been steadily increasing over the past two years.

"I'd say it's probably somewhere between 20 and 25 per cent costs overall that have increased and it may even be more," he said.

"And it'll be interesting to see what the rise in the price of fuel will do; it's getting close to $2 a litre now, so that'll impact transport and everything like that as well."

Critical labour issues

Due to the worker and supply shortages facing the industry, Mr Allan, who is a builder in Ballarat, said houses were taking 30 per cent longer to build.

"Everyone is having to wait, and it's not just the building industry. The wait on materials, and certainly the Ukraine situation has made things more uncertain because we import so many materials," he said. This has occurred at a time of increased demand.

"But the supply of labour is certainly an issue; we've had that problem for over 10 years."

MBV figures show that during the past three months of 2021, the number of loans to owner-occupiers for home renovations was 77.8 per cent higher than a year earlier, with the pace of growth even stronger for investors.

COVID workplace restrictions on close contacts and positive cases also exacerbated the problem, Mr Allan said.

"Whether it is truck drivers delivering materials to site or the tiler can't come in, or your plasterer can't come in today … it's just dragging out the process.

"We're hoping clients can work with their builder and be sympathetic to the situation."