Brokers and their clients are being affected by the rising costs of building materials after clients have signed a fixed-price contract.
The spike in building materials pricing is affecting builders, the real estate industry, and the economy on a global scale.
As a result, it creates additional work for brokers and adds stress to clients who are working towards their dream of building their own home.
Prpty360 is a company designed for property investors to maximise their investment returns through reduced risk provided by professional insight and trusted guidance. Director Julian Fadini (pictured) said the impact of material costs was having a ripple effect on the building industry.
“The majority of builders use HIA fixed-price build contracts, so when the contract price no longer meets the original build material pricing, the client needs to come up with the funds out of their savings or revert to the broker to see if the bank can help with the shortfall,” Fadini said.
He said construction costs had risen significantly over the last 10 months.
“As a whole, Australia looks to construction in terms of innovating the economy and residential construction is a big part of the economy,” he said.
The concern for Australians building homes were the added pressures of rising inflation and property prices.
“There is heartbreak for those who are building a house and might be living in an old house or renting whilst building,” Fadini said.
“Rents are increasing across the board because of the supply issue in the rental market. The consumer can be hit with increased build costs along with increased living costs, making the build process very stressful.”
With the federal budget announcement on March 29 and the federal election occurring within the next two months, Fadini said it would be interesting to see what housing policy frameworks the government would announce.
“No-one is confident to predict how long the building material shortage will last for or what will come next,” he said. “Unfortunately, there seems to be very few positive signs for the foreseeable future.”
