Building materials in low supply as household renovation costs soar
Low interest rates coupled with astronomical housing prices has seen a rise in new home builds and renovations nationwide.
The building boom just so happened to coincide with major disruptions to supply chains and a shortage of materials and labour, sending construction cost growth rates the highest they have reached in 16 years.
CoreLogic research director Tim Lawless said costs have escalated dramatically over the last year.
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A building boom has coincided with soaring construction costs due to a lack of materials and labour. 9News
"People's budgets need to be a little bit larger than what they thought a year, or even six months ago," he said.
Cordell data shows cost increases are still being driven primarily by timber, mostly structural timber.
Other segments of the market also remain volatile, with increasing pressure on metal costs.
The cost of timber soared 39.7 per cent, steel 43.1 per cent, copper pipes and fittings by 24.1 per cent.
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Construction materials are in low supply as the nation continues its building and renovation boom. 9News
Metal roofing and guttering rose by 14.8 per cent, aluminium doors and windows all climbed 15 per cent and insulation was up by 10.6 per cent.
Even mirrors were up by 10 per cent.
But it is not only material costs causing concern; Australia is currently facing the worst skills shortage on record.
9News can reveal trade worker availability has plunged a further 20 per cent in the last quarter.
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The cost of materials have gone up, driving the building boom to blow out budgets. 9News
The lack of labour is adding to the time it is taking for builds and renovations to be completed.
While some of the material shortages could improve this year as supply chains catch up to record level demand, the skills shortage is expected to continue well into next year.
"Return of overseas migration will see a strong demand for new housing, so this boom, this super-cycle of construction, is going to last well into 2023," Tim Reardon, chief economist at the Housing Industry Association, said.
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