Gympie real estate: building boom hides threat for for small operators

The nation-wide timber shortfall will leave small Gympie builders at risk of collapse despite the region being in the midst of its best property boom in more than a decade, industry insiders say.

Gympie building industry experts are warning the region’s best property boom in a decade could be concealing hidden dangers for smaller companies as a nation-wide timber shortage begins to bite.

Builders and subcontractors have said ordering times on some things have blown out by up to a dozen weeks as Australia’s construction industry grapples with a big surge in new housing work on the back of government economic support in response to the pandemic.

State Government figures show residential lot sales in the region, including house and land packages, almost doubled from 2019 to 2020, jumping from 174 to 317.

This included 280 vacant land sales and 37 packages, each the highest for a 12-month period since at least December 17.

Building approvals for the year ending March 2021 also hit their highest level in more than a decade at 439, according to the latest figures from the ABS.

Unfortunately, these are balanced against (and directly causing) a nation-wide timber shortage, with processing mills expected to be under pressure until at least October trying to meet demand.

Imports that usually accounted for about 25 per cent of demand had also fallen off.

Wayne and Michael Stolberg say their own work is up 30 per cent on pre-COVID levels.

“The building boom is impacting many trades and building materials,” Timber Queensland CEO Mick Stephens said on Thursday, adding the industry was doing everything it could to to increase supply in the “overheated” market.

“A recent survey by Master Builders Queensland found that price increases and delays were affecting literally all categories of building materials and trades from roof installers and plumbers to carpenters and painters,” he said.

Subcontractors Wayne and Michael Stolberg said their business was up about 30 per cent on pre-COVID levels.

“It is stupidly busy,” Wayne Stolberg said,

However, the booming business also meant Gympie’s industry was now on the cusp of falling into the void left by the shortfall.

“One day you’ll get one type of material and the next they’ll want you to use something else because you can’t get what you normally use,” Mr Stolberg said.

GJ Gardner’s Wojtek Stainwald says a number of builders will go broke if they cannot manage the delays happening in the supply chain..

“Your forward planning has had to have gone from two to three weeks, out to six, eight or 12 weeks for situations.

“If you haven’t got yourself locked in, you’ll have jobs sitting that could be finished and you won’t have panel lift doors on because you haven’t allowed that sort of time.

“They’re the ones that will get caught.

“If they don’t catch up they’ll never catch up.

“They’ll be the ones left with projects unfinished (and) doors missing.”

Chris Dodt of Hotondo Homes worries price rises on items affected by the shortfall will not drop once the crisis is over.

GJ Gardner owner Wojtek Stainwald agreed builders would be at risk.

“Smart” ones would be able to power on through the shortage, he said, but those without foresight or the backing of a major franchise were at risk

It was a view shared by Hotondo Homes’ owner Chris Dodt who said the weeks-long delay on products posed a problem for companies “that aren’t used to ordering in advance”.

“A number of builders are going to go broke,” Mr Stainwald said.

Mr Dodt was also worried the price hikes due to the shortfalls (the price of timber had jumped twice in eight days) may mean high prices were here to stay.

“Nothing ever seems to come down,” Mr Dodt said.

“The difficulty we’ve got now is putting together packages for the future without knowing the prices,” he said.

Mr Stainwald said the rises forced him to be “on the front foot” to make sure undervalued prices weren’t being locked in.

But he said Gympie’s prices “are still very low” even with the jumps, and he expected the rise to smooth out over the next year.

“I don’t think there’s going to be an issue for Gympie as long as they don’t start doing 300sq m blocks,” Mr Stainwald said.