High prices & material shortages

by | Feb 4, 2022

The rising costs of New Zealand’s construction materials show no signs of slowing as widespread shortages of key products continue to plague the industry, a recent RNZ report has revealed.

Tradespeople and building suppliers told RNZ they were struggling to source even the most basic materials, including exterior and interior cladding which is causing long delays that are doubling build times.

Combined Building Supplies Co-Coperative Chairperson, Carl Taylor said the delays are the result of increased demand as residential building consents hit record highs, along with a shortage of labour needed to make the materials and unavailability of materials needed to make specific building products.

Mr Taylor said GIB plasterboard now has a lead time heading to May or even June.

“If we cannot get the materials we cannot work, plain and simple,” he said in the report.

Fletcher Building’s products division also confirmed that GIB plasterboard was in extremely high demand and was keeping customers informed on when products may be available.

Mr Taylor said in the report that ongoing delays for a wide range of products was stretching the build time for an average house from five to 12 months.

“We are aware of jobs where the builders will stand their frames and they are having to wait another three or four months until they can get their cladding or get their roofing or get their windows – and that is just in the residential sector,” Mr Taylor said in the report.

Prices for building a new dwelling increased by 16 per cent in the December quarter, compared with the same period in 2020.

It is expected the prices rises are only set to become worse with Combined Building Services forecasting further price hikes of 15 per cent across all products in the coming year. While tradespeople were wearing the costs in the short-term, it was inevitable that the price increases would be passed on to consumers, Mr Taylor said.

BuildLink General Manager Simon Burden said he did not think much could be done about the shortages other than different parts of the supply chain communicating clearly with one another to manage expectations.

“If we were to have a set of plans to come over our desk at one of our stores right now, you have got to be realistic with the builder or the homeowner who is wanting to build that house [about how long it would take],” Mr Burden said in the report.

Mr Taylor agreed that clear communication within the industry was critical but he also said that he thought the government needed to have a constructive look into how the supply issues could be addressed.

He said that just another factor causing delays was the time it took for certain products to achieve clearance from councils or the Building Research Association of New Zealand (BRANZ) before they could be used in New Zealand.

“That system almost needs to be fast-tracked so other companies on the other side of the world can actually bring their products here with ease. But on the same token, the products still have to be tested and I know there is some time around that,” Mr Taylor said.

A BRANZ spokesperson also pointed out in the report that when companies brought their products to the domestic market it was up to the councils to test if they met the building code through the consenting process.

“We cannot definitively say how many individual products are available in the New Zealand market or how many are used in an average build, (hundreds if not thousands).”

Not all of these will be either appraised or individually certified, the spokesperson said.

“It is, therefore, unreasonable to imply that product testing processes are a considerable contributor to broader supply chain issues,” the spokesperson said in the report.

BRANZ offered appraisals and CodeMark certifications as a means for suppliers to ensure their products comply with requirements, but it was only one of a range of CodeMark certification providers, and suppliers did not need to need to engage it to demonstrate code compliance.

“They may submit their own evidence or offer an independent expert evaluation to ensure that a council has confidence that all components of a building are fit for purpose,” the spokesperson said in the report.