Residential building material and labour shortages
The current, Australia-wide shortage of building materials and skilled trades is impacting the residential construction industry in Western Australia.
Supply of building materials has been affected by the COVID-19 pandemic and increased building activity following the State and Federal stimulus grants. It has impacted everyone in the supply chain, from manufacturers and suppliers to contractors, subcontractors and home owners. There is also a genuine labour shortage.
While this can be frustrating for all involved it’s important to understand the current market and be aware of likely delays, outside of builders’ control.
Open and honest communication before a contract is signed and throughout the building process is strongly encouraged between home owners and builders.
Snapshot of the current WA situation
- 89% increase in dwelling building approvals in WA for the 2020–21 year to date, compared to 2019–20 (ABS May 2021)
Information for home owners
If you are looking to build or renovate, we suggest you discuss the current industry shortages with your builder or tradesperson. Check that the materials they need for your work are currently available and ask your builder how future shortages will be managed.
Ask about possible delays you should be aware of and check your contract carefully before signing. Ensure that they have incorporated reasonable allowances when calculating the commencement and completion dates.
As the situation continues to change, regular updates should be requested and provided throughout the building process. Being aware of delays as they arise will ensure expectations of completion within the timeframes in the contract are realistic.
Sudden demand for building work has also seen an increase in some trade pricing, however Home Building Contracts Act 1991 (HBCA) limits the circumstances in which a builder can increase the price agreed to in the contract. Building and Energy has published a guide on price increases to home building contracts due to a rise in the cost of labour, materials or both.
Home owners should consider seeking independent legal advice before agreeing to variations that increase the cost of their home building work contract for situations other than those provided for in the HBCA.
The Housing Industry Association and Master Builders Association have produced the following helpful information for consumers:
Information for industry
It is important to have open communication with home owners and keep them updated on the changing building materials and labour supply situation.
Talk to suppliers to obtain estimates on potential delays and to your subcontractors to check their availability to complete work before signing a building contract. The best way to avoid disputes down the track is to have honest, up front discussions which manage timeline expectations before starting the project.
Building and Energy has published a guide on price increases to home building contracts due to a rise in the cost of labour, materials or both.
The Housing Industry Association has produced the following helpful information for industry:
- Product substitution guide
- Toolkit - Managing price increases and delays
- Are you experiencing delays in construction work?
Dispute resolution process
Home owners or builders who believe there has been a breach of the HBCA or a home building work contract may be able to seek a remedy under the Building Services (Complaint Resolution and Administration) Act 2011. Building and Energy remains impartial when dealing with complaints, with decisions being made having regard to all the available evidence.
Further information on lodging a complaint is available at the Building service and home building work contract complaints webpage.
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