Some builders say they feel their sector is in chaos as they struggle to source material and face continuous price hikes.
The New Zealand Certified Builders Association says it’s the worst it’s ever been and supply issues are across the board with local manufacturers are overloaded with demand and international shipping delays.
The association’s chief executive Grant Florence says builders are being notified of price increases on a weekly to fortnightly basis.
“Some might be low as 3 or 5 per cent and some might be high as 10 or 15 per cent. So quite significant,” he said.
New Zealand is in a building boom with 47,331 consents issued for new homes in the year to September – up 25 per cent from the year before.
And the demand is expected to continue with an estimated 265,000 homes forecasted to be build in the next six years.
But the supply and cost problems are catching some people off guard as buyers fail to understand the full risk of purchasing off plans and possibly paying significantly more than originally agreed.
Construction lawyer Prue Miller told 1News prices are fluctuating more than ever.
“This is the first time in 15-20 years that I’ve seen these cost escalation clauses really used and it's just now that builders are seeking to rely on them because the costs of materials are going up at a pace and at a rate that builders aren't prepared to take the risk on,” she said.
Florence said councils could help by allowing builders to use alternative materials when supply runs short.
He estimates it will take several years for these problems to be fixed.
“It’s really been a tsunami of issues that continue to grow, I don’t think we’ll see much improvement in 2022,” he said.
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