Victoria’s building and construction industry is currently enjoying a huge boom in activity thanks to the introduction of the HomeBuilder grant scheme, but according to Master Builders Victoria (MBV), that boom is creating significant supply chain issues which are threatening the scheme’s undeniable success.
According to MBV CEO, Rebecca Casson almost 80 per cent of Victorian building and construction businesses are currently experiencing significant delays in being able to secure concreters, joiners and bricklayers.
“HomeBuilder has been a lifeline for Victorian home builders and is continuing to drive a forward pipeline of work but some of them are now struggling to keep up with demand for skilled tradespeople and some critical building materials,” she said.
“In collaboration with our state and national colleagues, we’re currently working with the Federal Government on potential solutions to relieve the pressure on the supply chain and ensure that the benefits of HomeBuilder are maximised.”
“We want to avoid a situation where delays in the availability of key tradespeople and key materials – along with escalating costs for both – threaten to undermine HomeBuilder’s widely acknowledged success.”
The HomeBuilder grant scheme was introduced in June 2020 and provides eligible home owner-occupiers (including first home buyers) with a grant to build a new home or substantially renovate an existing home.
It was developed to activate and bring forward demand to avoid a forecast ‘valley of death” for the home building sector at the height of the COVID-19 crisis in 2020 and has stopped thousands of mostly small building and construction businesses from going under and saved thousands of jobs.
Ms Casson said Master Builders had just conducted a national survey of its members to determine the extent of the evolving supply chain problem.
“What we found was that nationally 78 per cent of respondents reported experiencing delays of up to three weeks, along with an up to 10 per cent increase in the cost of materials and specialist trades/labour,” she said.
Ms Casson said the high demand right across the country is exacerbating the challenge for Victorian home builders along with a global shortage of products like timber and steel, and a lack of building product reserves are combining to cause potentially significant delays in the construction of homes and significant price increases.
According to Ms Casson, the Victorian building and construction industry is reporting:
- 69 per cent experiencing trade delays
- an average delay of 15 days for concreters, bricklayers, and joiners
- 8 per cent of businesses experiencing trade delays of more than two weeks
- 4 per cent experiencing trade costs increases for concreters, structural steel workers and carpenters.
For Ballarat based business Stuart Allen Building, the negative financial impact of supply chain issues has been a significant challenge.
According to Director Stuart Allen, he hasn’t seen anything like it in 20 years of being in business.
“Prices are up, we’re struggling to get some trades and we’re trying to keep clients happy who just want to see their jobs happening and completed,” he said.
“We’re trying to build a buffer into our contracts but it’s a bit hard when you don’t know what materials and labour are likely to cost, or for how long.”
“HomeBuilder has been a huge success, but unless a solution can be found to these supply chain issues and increased costs, an unintended consequence could be negative cash flow impacts for local home building businesses, resulting in the risk of small business insolvencies and people missing out on their HomeBuilder grants,” said Ms Casson.
AVAILABLE FOR INTERVIEW – MBV CEO Rebecca Casson
MEDIA CONTACT – Leigh McClusky 0411 711 780 [email protected]