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Soaring timber costs place huge pressure on Vic builders

Soaring building material costs, especially timber like treated pine, is placing huge pressure on Victorian tradies and could send some bust, industry insiders warn. Source: Sunday Herald Sun

Skyrocketing costs for building materials could send Victorian tradies to the wall, industry insiders have warned.

Builders are reporting paying more than twice as much for untreated pine in some Victorian regions this month, than they were just a year ago.

Untreated pine is a standard material used in building, particularly house framing.

Housing Industry Association (HIA) Victoria executive director Fiona Nield said builders were trying to navigate a storm of strong demand from customers, spikes in building costs and interruptions to the global supply chain.

“The increasing price of a whole range of building materials, including timber, over the last 18 months, has placed significant pressure on builders to manage both the cost of an individual build, but also the timing of construction,” Ms Nield said.

“Most timber supplies are locally sourced, but there has been pressure on the supply of im-ported timber also as many countries experience home building booms and international freight is impacted by Covid.”

The cost of construction materials in general has shot up by about 12% over the last year, Australian Bureau of Statistics figures show.

The jump represents the biggest annual increase in 40 years.

Some materials such as timber have increased in price more than other materials and have also been in shorter supply.

Steel, terracotta tiles and plastic and copper pipes and fittings, are also among products which have soared in price.

“This reinforces the inflation data we saw earlier last week which revealed most of Australia’s inflation right now is contained within just three sectors; home building, fuel and domestic holiday and accommodation,” Ms Nield said.

Master Builders Victoria warned the jump in building costs and withdrawal of government industry support packages could result in more insolvencies across the industry.

“There are about 111,000 small building and construction businesses in Victoria, this issue is of significant concern,” chief Rebecca Casson said.

“Our industry remains Victoria’s largest full-time employer.”

Among the most high-profile recent insolvencies was Melbourne-based high-rise builder ABD Group. It entered insolvency in November, stopping work on a number of major projects including the 25-level Liberty One residential tower in Footscray and 300-unit build-to-rent project in nearby Spotswood.