- Timber prices soared as domestic suppliers content with global demand
- 8.5 million hectares of forest burned during the 2019/20 bushfires
- $1.6 billion in residential construction remains on hold
Thanks to surging demand, timber prices have soared by 380%, according to data compiled by Grafa.
With domestic timber suppliers wavering following 8.5 million hectares of forest burned in the 2019/20 bushfires, more than $1.6 billion in residential construction remains on hold, impacting about 9,800 households.
Grafa analyst Dan Petrie warned the shortage is so significant domestic and globally, that time and cost blowouts are likely to continue for the foreseeable future.
“While timber prices have since fallen from a record high, supplies are unlikely to become cheaper any time soon with scarce imported inventories fetching top dollar,” Mr Petrie said.
“This shortage is going to be felt the worst by young people who’ve received the HomeBuilder grant, and that’s going to have a flow-on effect to the economy as more and more projects are put on hold indefinitely.”
Dan Petrie, Grafa analyst
Mr Petrie also noted of the 99,000 families who applied for the grant, about 10% have been left in limbo.
Likely, many will be forced to resign their lease without knowing when the construction will conclude.
The above graph shows the difference between residential projects commenced and completed on a quarterly basis. This highlights the diminishing capacity of construction businesses.
“Because of affordability constraints and critical value thresholds to remain eligible for the grant, some households have been left with no choice but to put projects on hold indefinitely until the current shortage ends,” Mr Petrie concluded.
