Construction Supply & Demand Issues in SEQ and What You Need To Know
It is no secret that the knock on effects of the global pandemic have had a major influence on supply and demand issues for builders and their suppliers across Queensland and sadly South East Queensland has not escaped the scenario that none of us really wanted or needed. That being said, we inevitably find ourselves here in this position meaning that we all have to make the best of a less than ideal situation.
So what does it actually mean when we mention supply and demand issues?
Basically, we are at a point where there are now, and continue to be, significant impacts on the progress of some existing builds and nearly all new builds that are commencing in some form. The two most prominent issues being experienced simply come down to delays in the provision of materials as well as some mammoth spikes in the cost of materials.
As an example, some of the worst delays being experienced that we have learnt about have been up to a year for some very unlucky timber orders which ultimately pushes prices higher as it becomes a much more scarce resource and as builders vie for preference.
Another perfect example of the price hikes is in some steel elements of the build, such as reinforcing, which has increased from around $81 per tonne in November 2020 to an eye watering $765 per tonne as at December 1st 2021. These are true and accurate figures which should now really begin to give you a clearer picture of the current state of the industry and the rather large challenges it is facing.
What has not helped ease the pressure off the industry is a seemingly perfect storm of events that have led us to where we are today, even prior to the pandemic hitting our shores. In 2020 Queensland experienced a harrowing year of natural disaster events that placed a small amount of pressure on the construction industry through all of the new insurance jobs that were now accessing a swarthe of the states tradespeople and supplies/materials.
This was certainly manageable and did not have too much of a domino effect until of course the pandemic made itself known to Australia and subsequently pushed droves of southern state migrants north to the sunshine state, ready to build. I mean can you blame them as where else would you want to spend weeks or even months being locked down?
Now add to this a government determined to keep our country from going into a financial freefall by ensuring ongoing low interest rates and continuing with the HomeBuilders Grant meaning that this is where we currently find ourselves. The final proverbial straw to try and break the back of the industry is imported materials suffering extensive delays never seen before due to supply chain disruptions in ports all over the world. Once again this is purely a consequence of literally shutting up shop for extended periods of time, as many were required to do across the world, and the inevitable chain of events that followed by doing so.
What can you do to safeguard yourself?
It is a rare Queensland builder that has not in one way or another been on the receiving end of these delays and multiple cost increases, so it is now the best time to ask your potential builder what they are doing to combat those variables that are obviously out of their control, and how beautiful bespoke custom homes can still be built by them on time and on budget.
A huge and vital element of being able to still build throughout these unusual times is by Queensland building companies factoring in everything that has been mentioned so far and working closely with clients to ensure there are no huge compromises to the integrity of their house design or their original idea of the perfect home. This all comes with total transparency, strong communication and processes put in place to ensure everyone is working together to achieve a positive outcome and the ongoing journey of achieving the client’s vision.
This is also the way we at Capri Building Group have worked through the problems faced since the beginning of the pandemic and throughout, by remaining a solutions based company focused on finding answers rather than being beaten down by the circumstances that have culminated to get us to this stage. We can all agree that there is nothing worse than receiving a shocking surprise regarding delays or cost blow outs all because you were not kept in the loop by a builder who lacks communication or would prefer to run in the opposite direction rather than have those tough conversations
The next incredibly important step, which can save you literally tens, if not hundreds of thousands of dollars, is to carefully and methodically read through your building contract to ensure you have a full understanding of what you are entering into as well as which party is responsible for which elements of the contract. It is also your responsibility to determine what is legally enforceable from both sides and ensure that you ask those questions prior to signing any contract. It is also time to have an open and honest conversation with yourself or your partner as to whether you can take on the additional cost and/or time delays that will almost certainly have a bearing on your project for at least the next 1-3 years as a rough guide.
It has never been more vital to ensure you are aware of who covers any cost increases throughout your home build journey once a contract is signed as well. You should be fully across how the cost increases are passed on and who is responsible for paying those costs. This is usually found in the clauses section of your building contract and should be clear and visible prior to signing. Please be aware that the vast majority of builders should still have a standard practice when it comes to variations being created throughout the build, however the days of handshake agreements and verbal contracts are well and truly over when it comes to one of the biggest investments you’re most likely to make in your lifetime.
By now it should be becoming clear that the most obvious and common sense approach would be to ask a lot of questions, do your research, read every document carefully and make certain you are dealing with a reputable and professional builder that understands one size does not fit all and that being transparent and offering high levels of communication is key to achieving the desired result.
How Long will the supply and demand issue affect our sector of the building industry in SEQ?
You’ve heard the saying how long is a piece of string? Well this is one of those scenarios where unless we all had a crystal ball it is near impossible to give a firm estimate as to when we would see the industry settle as the goal post continues to move and the need to pivot is still required on an ongoing basis. At the very least we are almost certainly looking at another year or two of similar effects on the Queensland building industry to provide you with some sort of reasonable and fair expectation in the meantime.
Please let us make it very clear though that the information provided here is not designed as a fear tactic or to scare anyone away from the exciting and life changing process of building their own home, but more so to open up the little known details that so many people were not aware of. We find that by sharing the state of things with all parties involved in the process it gives you a better chance of making a more informed decision as to whether now is the time to build or if you need to reassess your position prior to committing to anything.
Of course there is the chance, or at this stage the very high likelihood, that we have not yet seen the ceiling on price rises therefore this fluid situation is one we can only manage day to day, week to week and month to month for the time being. Open and honest communication is something that has been mentioned a couple of times but it is worth saying again as this is how everyone stays on the same page and ultimately avoids disaster.
So if you have just read through this and are now wondering if it is the right time to build your luxurious custom dream home, please feel free to reach out and speak to one of our friendly team to have a casual chat and ask those pressing questions. You never know, it may just help guide you in one direction or another depending on your individual circumstances.
Not ready to build just yet? Click on the link below instead and use this time to gather inspiration from our luxury home design range so that when you are ready to go, you have a ton of ideas to share for your custom built home.
Want to see our luxury home design range?
Download our luxury home designs for FREE and know how we can work with you to turn your vision into a reality.