Why Is There a Shortage of Timber in Australia?

A blog header with a truck of logs

If you are in or about to step into the construction industry this year, it’s worth being aware of the timber and supply shortage across Australia. Many of our students completing the CPC40110 Certificate IV in Building and Construction (Building), the CPC50210 Diploma of Building and Construction (Building), and the CPC60212 Advanced Diploma of Building and Construction (Management) are already familiar with this issue.

Builders told 7 News that this is the worst shortage they have experienced in 40 years.1

In this blog, we will discuss the causes, effects, and recommended solutions to the current supply shortage in Australia.

What is the 2021 Timber Shortage?

Thanks to government programs like HomeBuilder, there has been a rise in building projects around Australia. However, there has also been a low supply of materials that cannot meet this high demand. The industry is experiencing increased prices and delays.

Michelle Traill, the CQ Master Builders regional manager, told ABC News that her Central Queensland region is experiencing a boom in demand, but her suppliers cannot keep up.

‘It’s also hard to schedule moving forwards as some builders can be waiting anywhere from 22 to 26 weeks for some timber products.’5

‘There are other issues as well with roofing and lots of different types of materials. It’s not just timber.’5

Bushfires in Tasmania

What caused the 2021 Timber Shortage?

In a recent information brochure, Tasmania’s Consumer, Building and Occupational Services Department of Justice (CBOS) explained that:

‘Australia is experiencing this shortage of supply due to a global increase in demand for building materials. Some of the shortages have also been attributed to the 2019/20 bushfires which destroyed tens of thousands of hectares of softwood plantation that would usually supply the Australian construction industry.’4

‘Federal and State housing stimulus measures have also bolstered the residential construction sector, leading to a significant increase in new dwelling construction.’ 4

The department referred to HomeBuilder, a program ‘specifically designed to protect tradies’ jobs and catalyse economic activity in the construction industry, particularly residential construction, in response to the downturn caused by the COVID-19 pandemic.’ ‘More than 121,000 Australians have applied for the grant; it is expected to support around $30 billion of residential construction projects.’3

At first, the program required that construction begins within 6 months. The deadline was not possible for many builders due to the shortages. To combat this, on the 17th of April, the government extended the construction start time to 18 months for all existing applicants.2

You can learn more about the grant here.2

‘This shortage is predicted to be a short-term shock to supply, and pressure is expected to ease. However, it is having a significant impact on homeowners and builders now.’4

How does this affect tradies?

Builders and tradies are under significant financial pressure during this time. 7 News recently interviewed Mitch Butler, owner of Coastland Builders, about the effects of the shortage.

‘Yeah, been pretty tough at the moment. Because what happened was, before Christmas, the government gave the $25,000. So, we all sign up all these contracts, a fair few of them, thinking it’s going to be our best year ever. And as it’s turned out, it’s not the best year for us builders.’

‘Materials…there’s just none at the moment in Australia. There’s no timber. All our frames and trusses, they just can’t get the timber.’

‘All of a sudden, it’s your worst year in the way that you know you’re losing money, so you’ve just got to ride through it. As builder’s it’s what we got to do. But yeah, it’s not a good feeling, working for free… (The price of) tradies go up, materials go up, everything goes up. But we’ve signed a contract. We’re stuck.’6

How does this affect house projects?

Triall also told ABC that homeowners expect a delay of one and a half years.

‘Even if people are quoting on work, the builders are telling people you could be looking at 18 months before they start any construction work.’1

Workers with house frame

What can homeowners do?

Tasmania’s CBOS recommends that ‘Homeowners in contracts for residential building work should negotiate with their builder where there is a need for contact variations due to building material shortages.’ 1

Most of the shortages and delays are likely to be outside of the builder’s control. ‘Any variations to the contract terms must be in writing and signed by both the owner and the building contractor’ 1

What can building contractors do?

In their brochure about the shortage, the CBOS recommends that ‘a builder who has contracted for residential building work and is experiencing difficulties sourcing building materials should contact the owner as soon as possible and advise them of the situation.’ 5 This allows both parties to resolve any issues surrounding the project.

If the homeowner and building contractor cannot resolve the issue, you can contact your state’s building and consumer regulator to access advice or mediation services.5

Conclusion

Building material shortages have caused supply chain delays of approximately 22-26 weeks for some products. As a result, anyone looking to build a new home is facing a construction backlog that will likely last 12-18 months.5

The shortage is likely to continue into 2022. Until then, state departments are recommending that homeowners and builders discuss and potentially change contract details. That way, building projects can still be achievable in the middle of this shortage.

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