Project demand soars as Supply side dwindles
Materials and labour at a premium while homeowners clamour to get work done
Demand for renovations has gone “ballistic” despite long delays in getting materials and a shortage of tradies. Those in the industry say the current surge is due to the latest lockdown, with many homeowners keen to remodel their house.
Bathroom and kitchen makeovers were most popular, while others had opted to gut their entire home for a revamp.
Johnny Calley, owner of Calley Homes, said renovation inquiries were high and the company continued to field queries daily.
“One thing these lockdowns haven’t done is dampen people’s appetites to do some form of property development. Demand has not subsided at all.”
The biggest challenge was securing someone to do the work and getting a price.
“That is so unpredictable at the moment and not many tradespeople are prepared to price forward because of the uncertainty around material costs. Plus you only have to look at the unemployment rate at around 4 per cent and all trades are suffering from the labour shortage.
“The waiting list for some trades is quite long.”
National renovations franchise Maintain To Profit managing director Mark Trafford said long delays in sourcing building materials could mean some home renovations would not start until 2022.
“There is still a huge problem with supply. The entire building sector is struggling to source decking timber, framing timber, Gib Aqualine [for bathrooms and wet areas] and other key products.
“And it’s not just imported versions of these materials. Timber and decking products manufactured in New Zealand are also clogged up.”
The price of materials had also jumped and some appliances were taking dozens of weeks to arrive in the country. “It’s a juggling act to get this sorted.” The supply problem was now so acute that building companies had waiting lists for clients.
He said demand had gone “ballistic and is through the roof”.
Precise Builders owner Dave Fitzgibbon said he was struggling to keep up with demand and had just finished six quotes.
“A lot of houses are 20 to 25 years old so they are putting in new windows and roofs and recladding. Others have bought old houses and instead of bowling them and building new, which could be cheaper, they are fully renovating them.”
Fitzgibbon, who specialises in high-spec renovations and new builds, acknowledged the challenges. He had just ordered cladding for one client and the project hadn’t even started.
“I can’t get it for six months but I have found some and I’ll put
it in my lock-up and they will pay for it now.”
He said the company also had material-cost clauses in its contracts as goods were going up by 10 to 30 per cent.
Maintain To Profit’s Tauranga franchisee owner Randy Offenbaker said he was fielding six calls a day about renovations. “Inquiry levels across the whole Bay of Plenty have been pretty high but the timeframes and availability for everything to be done is becoming a bit of an issue.”
He said clients who were staying put in their homes often opted for topof-the-line fixtures and fittings, while Offenbaker advised those who planned to sell to “tidy it up and make it look nice but don’t overspend”.
Master Plumbers, Gasfitters and Drainlayers NZ chief executive Greg Wallace said people needed to make their product choices as soon as their renovation plans were done.
“Normally you do that when you were about to gib.”
He said customers may also have to pay in full for the goods when they were ordered and store them.
“For example, if you are getting a whole lot of windows, you are having to order those a whole lot earlier than
ever before. They would usually be delivered to the site and installed straight away but, to secure the supplier, it has to be done well in advance.”
Water systems and pipes were also being mixed and matched as some materials were hard to source.
Bunnings New Zealand head of merchandise Cameron Rist said demand for some building materials had increased in recent months as New Zealanders carried out renovations and new home builds.
“This is creating a challenge for the entire industry, with demand particularly strong for structural timber.
“We’re working closely with our suppliers and trade customers to forecast demand for structural timber and we’re advising customers to plan earlier in the build process to help manage stock as best as possible.”
Mitre 10 New Zealand trade general manager Derek Heard said the company was seeing evidence of increased demand in the home renovation space in both trade and retail.
“This is likely due to the ongoing absence of international travel. Our trade teams are working closely with their trade customers to forward-plan timelines and material requirements to minimise any impacts on projects.”
Data from Stats NZ show that nationally furniture, electrical and hardware sales reached $2.1 billion in the three months to June 2021, compared with $1.5b over the same timeframes in 2020.