Insurance calamity warning on construction shortages

A major building supplies company has warned of a coming repair crisis as a shortage of tradies results in scores of unfinished homes in Queensland.

One of the country’s biggest building supply companies has warned of a coming insurance calamity as a shortage of tradespeople due to the housing boom leaves unfinished homes across south-east Queensland.

Brisbane-based Stoddart Group says the need to repair thousands of hail-damaged roofs following a massive storm last year in south-east Queensland has resulted in a shortage of trades people to install roofs on new homes across the region.

Stoddart Group director of corporate development Nick Cook said there was now a risk of homes not being handed over to families on schedule, due to roofing delays.

Master Builders has warned the issue threatens to stymie Queensland’s home building boom with shortages causing a surge in costs. The cost to install one roof has in some cases risen from $25,000 to $38,000.

Nick Cook said there was now a risk of homes not being handed over to families on schedule, due to roofing delays.

Mr Cook said the number of roofs in south-east Queensland that needed to be installed had more doubled to 30,000 compared to last year as housing subsidies such as HomeBuilder coincided with the storm that had damaged thousands of roofs across the region.

“Last year, there were only 12,000 roofs that needed to be installed but now we are dealing with 15,000 new homes and 15,000 insurance claims for damage to existing roofs,” said Mr Cook, whose company provides roofing material and contractors across the country.

He said there was a need for collaboration between insurance companies and the construction industry to work out a fair and reasonable way to deal with the trade labour shortage and ensure another insurance calamity did not eventuate due to timber frames being exposed to the elements.

“We have heard of instances of roofs being delayed for months,” Mr Cook said. “Frames should not be exposed for extended periods, especially with the weather we have been having.”

He said industry efforts to obtain tradespeople from interstate and New Zealand had not been successful because governments were using housing to kickstart their economies to counter the COVID-19 downturn.

“Typically, we could bring trade from other states but this is the first ever national boom, where every state is at capacity. We thought we had enough trades people in south-east Queensland, but no one could have predicted the hail storm and how much damage it would cause,” he said.

The number of roofs in south-east Queensland that needed to be installed had more doubled to 30,000 compared to last year.

Master Builders Queensland deputy chief executive Paul Bidwell said insurers were paying contractors substantially more than builders of new homes and were under enormous pressure to get the work done.

Thousands of homes in Springfield, Springfield Lakes and Rosewood were hit late last year as multiple hail storms carved a path of destruction across Ipswich, a city west of Brisbane.

“One builder told me he has 650 roofs to fix at Springfield,” said Mr Bidwell. “There was also a storm earlier last year that cut a swathe through Rockhampton where homes are still waiting to be repaired.”

Mr Bidwell said the damage from storms had coincided with an upswing in new home building sparked by government incentives such as the Federal Government’s HomeBuilders grants.

“The home builder grants have been going gang busters but builders are getting cranky because they cannot get the tradespeople to do the roofs,” said Mr Bidwell. “We are concerned about the impact this will have on the balance sheets of some of the smaller builders.”

He said industry leaders would meet with government officials this week to discuss ways to alleviate the problem. “There is a need for everyone to take a deep breath and think of ways around it,” he said. One possible solution would be to extend the starting period for homes being built under HomeBuilder grants.

Close to 30,000 new dwellings are expected to be built in Queensland this year, almost 60 per cent more than projected in April last year before government stimulus measures came into place.

Federal Government figures show that more than 75,000 households have applied for a HomeBuilder grant, about three times higher than expected.

The cost to the government from the scheme has ballooned from $688m to $2bn, but economists expect the scheme to support $18bn of new construction and $50bn in broader economic growth.