Dream homes on hold

June 21, 2021 BY

First home buyer incentives have caused growing pains as the building industry faces a national shortage in materials.

DREAMS have been put on hold for many first homebuyers as the nation grapples with a shortage of building materials.

The 2021-2022 Federal Budget committed to creating more construction jobs while increasing home ownership with multiple grants to get Australians into their first home.

Master Builders Association of Victoria president Mark Little said the HomeBuilder scheme had been “great for returning the economy to pre-pandemic levels” but said it is now experiencing “growing pains”.

Mr Little, who operates Little Constructions in Geelong, said there is a national shortage on timber, concrete and steel.

“Timber is the main one at the moment, it is not just confined to Victoria it is a worldwide issue,” he said.

According to Mr Little, Australia typically produces 85 per cent of its own timber while relying on 20 per cent import.

“The building industry is running at above 110 per cent capacity but due to bushfires and the lack of import the timber production is at 75 per cent, meaning there is a 35-50 per cent black hole,” he said.

Along with timber, Mr Little said the demand for steel has increased by 36.5 per cent over the past 12 months.

“An average house might have up to $12,000 worth of steel in the flat,” he said.

“It is now costing up to $5,000 more for just the steel component.”

Mr Little said the shortage was not going to be a quick fix and there was “no light at the end of the tunnel”.

The HomeBuilder scheme was first introduced in June, 2020, and allowed buyers to receive grants of up to $25,000 for new builds, or significantly renovate existing homes valued at above $150,000.

Since its inception there has been more than 120,000 applications for these grants according to budget papers.

Geelong woman Jas Ormeno is building her first home in Charlemont off one wage after accessing government incentives.

“If the HomeBuilder grant didn’t come in, I wouldn’t have been able to afford this,” she said.

The incentives have contributed to a housing boom with first home buyers like Ms Ormeno now experiencing the impact of the shortage.

“I started the process in June 2020 when I purchased the block of land,” she said.

“The contract was signed in October and after that I didn’t hear much at all.”

Ms Ormeno said site cuts did not take place until late February, followed by the slab being poured on April 6.

Under the belief that everything was now running smoothly, Ms Ormeno was shocked to receive a notification for a three-month building extension in late April as a result of a material shortage.

“It’s now been 65 days with no movement whatsoever, and no update of when anything may happen,” she said.
“I’ve been working so long to get to this point, it’s just so hard.”

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