Builders all across Queensland have been experiencing severe issues when it comes to the supply of building materials and trades. This in turn is not only hampering the productivity of the builders but is also making the costs of materials go up.
Some of the factors contributing to these major issues are as follows
- There has been a sudden increase in demand due to the home builders grant. The increased number off interstate migrations and a more relaxed lending criteria with an all time low interest rate.
- Also the repair insurance work for natural disasters has kept many trade contractors quite busy.
- Extreme weather conditions due to continuous rain have also led to a backlog of work and delays onsite.
- The lock downs are also a contributing factor. With people going into quarantine, international shipping delays continue to disrupt the supply chain.
An extensive survey carried out in 2021 points out that the problems not only continue to rise but are now at an all time high. Things are looking down till the very next year as well. A look at the results of the survey would help you understand the severity of the problem.
Proper ways to manage the shortage problems and delays
QBCC is working to reduce the severity of the problem and at the same time is providing advice to a new accelerated builder consumer dispute framework.
It’s a known fact that increase in cost and the delays in production cannot be avoided and have played a major role in all building contracts.
For contractors who have already signed a contract with the clients it is important that they need to discuss an alternate time frame and some variations with their clients. Communication is key when you want to avoid dispute and keep things clear from the very start. You need to provide your clients with the general statement regarding the current situation and explain to them how it has impacted pictures.
On the other hand if you are about to sign a new contract make sure that you read the commitments in accordance with the current situation of material shortages and cost increase.
Make sure that the contract clearly lists down all that has been going on and how it is going to impact the production. Make sure that you are able to deliver what you are agreeing to and also recheck the estimates to ensure that those still hold true. Make sure that you are in constant touch with your builder before agreeing to terms of the contract.
In certain cases it might be possible to get an extension of the time for the completion of the project under the terms of a contract.
If the home builder grant is applicable, the owner would be in eligible for the grant. If you do not complete the building within the required time frame.
There are builders who have turned down certain special conditions and more frequent installments in order to deal with the problems. Although many of those contracts have been rejected by mortgage lenders. Also it might be difficult to ensure the legal entity of the special conditions because it requires a legislation to ensure that the building contract can be varied.
For more information on dealing with delays and shortages and the cost of building a new home in 2022 please contact us today.