House building boom could soon hit ceiling due to shortages of materials and workers

Wednesday, 23 February 2022

Homeowner Rushad Irani was faced with a huge budget blowout despite the Master Builders Association guarantee.

There may be a building boom but a shortage of materials and subcontractors is said to be making it difficult for smaller building companies to complete projects.

Builder Rigo Varu, of R&B Construction in Beachlands, Auckland, ordered the plasterboard he needed six months in advance of a job but it still was not enough.

He made the order for a job he is scheduled to build in April but has already been told it will be at least May before he receives it.

He is also looking at a wait time of 12-15 weeks for pre-nailed timber framing. It means telling his client the job will have to be put on hold.

Material shortages and steadily increasing prices make it hard to price a job, builders say.

* Builders face 'shortages all over the place' thanks to 'berserk' housing market and Auckland's lockdown

* Builders have been stockpiling timber as they brace for supply shortage, builders' association says

Small building firms are having to delay jobs which means it takes longer for them to get paid. (File photo)

“It is just crazy. You try to get an estimated time of arrival and work backwards to give your client a start date but it is a gamble,” he said.

Varu said it was common for builders to drive a trailer around Auckland stopping at various supply yards picking up bits and pieces, hoping to get everything needed.

Pre-nailed timber is one of the materials that builders are finding it hard to come by in Auckland. (File photo)

“It is a rollercoaster looking for materials. Sometimes they are there, sometimes they are not.”

Varu said he had tried to stay away from large jobs, sticking to renovations and small houses, so he could be confident he could acquire all the materials needed.

Master Builders Association chief executive David Kelly said having to try to store up materials several months in advance of a job had been putting pressure on small building firms.

Watercare typically records 5000-6000 connections for new houses each year but last year that skyrocketed to more than 10,000. (File photo)

“The fear for small builders is that they don’t have the cash flow to purchase and store those materials ahead of time, and consumers are not willing to pay that far ahead either.”

Kelly said the building industry had likely hit capacity in terms of the number of available workers and availability of materials.

“I think it would be hard to build any more houses than are being built now. To increase the output there would have to be a change in method, such as building offsite.

Small and large building firms Stuff spoke to said stockpiling had contributed to a material shortage but none said they had been storing up material themselves. (File photo)

This month, Fletcher Building subsidiary Winstone Wallboards announced it would not take new orders for plasterboard from retailers until June.

Are you a builder that has had troubles with supply? Contact jonathan.killick@stuff.co.nz

Fletcher chief executive of building products Hamish Mcbeath said its Auckland plants were manufacturing plasterboard 24 hours a day.

He told Stuff Winstone Wallboards had been dispatching enough plasterboard for 1000 new homes each week. A new plant is under construction in the Bay of Plenty but it won't be operational until June next year.

Meanwhile, there has been a boom in the number of new houses being built in Auckland.

The number of building consents issued each year has been steadily rising over the past five years, increasing from 10,867 in 2017 to 20,529 in 2021.

However, it was not until last year that those rising consent figures actually translated into more houses being built. Watercare’s figures for connections for new houses showed a sudden surge in 2021.

Despite lockdowns, last year there were 10,956 new single meter household water connections. That was more than double the 5123 new connections in 2019.

Bret Robinson, of Fowler Homes in South Auckland, said his inquiries for new builds quadrupled following the 2020 lockdown. He was “flat out” all of last year.

He said conditions were difficult because engineers and subcontractors were also in high demand, slowing down projects.

Sole trader Jordan Alomari, of Kallisto Construction in Whitford, has a kitchen job next week but his order of plasterboard had not arrived.

“The job will have to go on hold and I have no idea when I will receive it.”