helping you to make decisions on your next project......
Timber Frame Builders Perth
The past years have seen unprecedented price increases and labour shortages in the building industry in Perth, Western Australia.
If you live in Perth and have investigated doing a home renovation or building a new home, it will come as no surprise to me that you were left gob-smacked at the time delays and cost increases that you have witnessed over such a short period.
Thanks to a global pandemic followed by severe shortages in labour and materials, Australia has experienced some of the most significant jumps in inflation on record across all industries.
The construction industry has seen some of the most significant increases in costs, with the Australian Bureau of Statistics recording around a 40% increase in the cost of timber and steel. As a builder, our timber prices have gone up over 150% based on our builder’s price and the current price we are paying for timber, specifically at Bunnings Pty Ltd.
The cost to lay a brick jumped from around $1.5 up to $3 in the space of 6 months. There were plenty of memes of Bricklayers driving off into the sunset in their new Porsche on Facebook and Instagram to portray this mental image of such insane price increases; I mean, who wouldn’t be happy with a 100% increase in their salary? Jokes aside, getting the bricks on site was also an issue that played havoc for the brickies and us builders!
But the question on everyone’s lips is… When will this all slow down?
We can all see that things are slowing down as we are all now grappling with ever-increasing costs of our mortgages, lettuce, and the price of petrol. The Australian government have taken an aggressive approach to try and curb inflation and this has now put most Aussies out of pocket a further $500+ a month on their mortgage, this is to try and slow the demand for goods and services.
This has undoubtedly caused a drop-off in demand across all industries, as we are seeing now.
In the construction industry, we have also been hit by this slowdown. However, at this stage, it is only on the front end. We have certainly seen a downturn in the number of enquiries we receive day to day from potential homeowners wanting to build or renovate their homes. More and more people realise the purchasing power of their money is diminishing. Therefore, they are less inclined to spend on renovations and home extensions.
Homeowners are questioning us at Distinct Building Company all the time as to why the prices are still rising for goods, and labour is not stopping or going backwards. Unfortunately, we are still receiving weekly emails from our suppliers regarding price increases, and our quotes continue to get bumped up by some trades. The price increases we see from suppliers are more spaced out and seem less, which is a relief and a sign of hope.
This leads me to a silver lining and my analysis of the picture below…
While finishing trades remain busy as we work through the gigantic pipeline of building work, there is a gradual drop-off in the starting trades.
When you first build a home, you use a bricklayer, concreter and carpenter, these trades are considered starting trades and their workloads seem to be gradually slowing down. There has been a lot of talk about brickies even putting their prices down to more reasonable levels.
Carpenters and concreters, when you speak to them, seem less stressed than they were 12 months ago and are being more realistic on timing and giving us dates to tentatively book them in, which is excellent. Previously we were lucky if the trades answered their phone or responded to an email.
These starting trades are still very busy, but there is a change in the air, allowing builders to run jobs that little bit smoother into the end of 2022.
As we get through this pipeline of building work, each trade becomes less busy, which results in less demand, which eventually will lead to prices stabilising and work completed in a timelier manner.
Due to the aggressive nature of the Australian government to curb the inflation rate, there has been a bit of a ‘cliff’ regarding building approvals. By this, I mean we have seen around an 8% drop in the private sector housing approvals for September alone! Therefore, once the abnormally large pipeline of buildings slows down and the cliff approaches, we will surely see a slowdown in trade supply. I hope that this will happen around mid-2023 or sooner if we are all lucky.
As a builder, we prefer a quiet industry, so we can focus on giving our customers the best service possible, which is much easier to do when your trades answer your calls and show up when they say they will.
Will this affect the price of trades and materials?
We will know once it all unfolds, as we have significant global economic events happening now around the world that could also affect the supply constraints of materials, such as the war in Ukraine.
So, without leading you down a garden path to the land of nowhere, I hope this gives you some comfort in knowing that there are blue skies ahead for the homeowners hoping to build or renovate. However, those blue skies may be here in mid-2023. That assumes we do not experience further pandemics or un precedent global events!
The best thing about this whole situation is that if you are planning a renovation or build into 2023 and beyond, then it is good news for timing. Hopefully, we get a stop to price increases and, even better, some price reductions! This will help us as a builder running jobs and you as a homeowner so that you get more bang for your buck and a swifter build process.
If you are considering a renovation or new build in the future and want to work with a builder that puts you first and prefers to remain a small and personal builder and you want to work with your builder throughout the design phase, then feel free to reach out to us and find out more about our process and if we will be the right builder for you and your next project.
Timber Frame Builders Perth