Building Material Costs in 2022 & What It Means for You
It is no secret that the cost of living has risen dramatically in the past two years and many industries, are feeling the pinch. These surging costs for raw materials has affected the building industry in the year of 2022. For example, the availability of materials, tradies in high demand and flow-on, are all factors that are putting pressure on large-scale development companies.
If you’ve been dreaming of building a home for a while, and the opportunity has finally arrived in 2022, you may wonder how the recent pandemic events and the rising cost of living will impact your build. Several factors influence the cost of your build, from the type of land you have to the quality of new home builders you desire.
While the cost of construction always varies dramatically from one job to the next, the impact of a global pandemic has changed the construction landscape, adding more variables to the potential cost of building a home. Knowing how to navigate the effects of the new normal regarding building materials, supply and demand, and timeframe expectations can give you unique confidence and peace of mind during your new home build.
The typical costs of building a new home
- The size of the property
- The type of land and its challenges
- The desired timeframe for completion
- The quality of fittings and fixtures
- The complexity of the design
Like many professionals across many different industries, builders are experiencing a range of material challenges from the fallout of the pandemic.
In 2022, there may be more budget factors to consider than what is listed above. It’s important to understand industry demands so you can have confidence in your build and be realistic in your budget.
2022 Challenges the building industry faces
1. Increased material cost
Inflation is a part of life and was a constant consideration for every industry even before coronavirus was a part of daily conversation. Since the pandemic began, there has been an increase in the cost of timber by nearly 250%, and the cost of steel is at its highest in 10 years.
However, the 2019/2020 bushfires are much to blame, with an extraordinary amount of softwood plantations being destroyed, which would typically supply the Australian construction industry. According to the Australian Bureau of Statistics, the items that have increased in demand the most are timber, board, joinery, and steel products such as steel beams and reinforcing steel.
2. Shipping delays/supply chain disruption
Many countries went into full scale lockdowns during the pandemic, often meaning few exports were going out, resulting in fewer imports coming into dock. Before the pandemic, 20% of structural timber came from the UK and overseas sources. In addition, many factories were hit with covid outbreaks, causing sudden closures.
In parts of China, even the power supply was affected, forcing workers to hang up their tools. Combined with the flooding in parts of NSW and QLD during 2021, the supply chain of materials both nationally and internationally was heavily disrupted.
3. Increased demand
As more people work from home, it is no surprise that renovations are the new vogue. This has caused a global surge in demand for building supplies, workers, and new home builds.
The country has been experiencing some of the lowest interest rates on home loans. Combine this with a national housing shortage, and new home builds are the perfect solution. The demand for detached and multi-unit housing has never slowed, as savvy investors and first home builders make the most of the opportunity to grow their property portfolio.
4. Shortage of workers
You would be in a unique position if a shortage of workers hasn’t impacted your industry since lockdowns became a part of life in early 2020.
Builders, architects, and designers unfortunately aren’t immune to covid, and this shortage of workers plus forced worksite shutdowns and isolations has put the industry in a challenging position.
How to plan for your home build in 2022
Devise a thoughtful plan to avoid shock, delay, and disappointment in your next home build. Plan your budget strategically and work with expert home builders. There is a good chance that whatever you improve or upgrade on your home will pay off in the long run.
Homes continue to be an excellent investment, perhaps now more than ever. Custom home designs allow the intelligent investor to create a home that will yield the highest weekly rental return and highest sale value down the line.
The right home builder will help you plan for success
Choose a local home builder to your area to ensure reasonable costs and achievable timeframes. Because of this year’s rising material and production costs, many people are realising that large-scale home building companies are no longer the right solution for their project.
Now, more than ever, home buyers are turning to local, small-scale home builders.
If you live in New South Wales, Sydney home builders will give you the flexibility to pick and choose what is important to you and where you want to prioritise your budget
Need a home builder in Sydney?
New South Homes’ designers, architects and builders create new homes that will suit your budget and needs perfectly. With a realistic budget and a building team who knows how to make the most of your build, get the home you’ve been dreaming of.
If you’re ready to work with a team that can create your high-quality custom home – the time is right to get in touch with our award-winning crew of experienced, understanding and dedicated custom home experts. Don’t put off your build any longer and get in touch today.
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