Industry Whip-Around - August 2021

For your information, below is a compilation of news and updates compiled from referenced sources.

HIA Building Approvals Data, August 2021

Globally, timber supply cannot meet demand

Unprecedented demand for framing timber is at record-high levels right across the world, including here in Australia.  The boom of the global population's demand for new detached homes and renovations of existing dwellings is due to a combination of factors which include:

  • playing catch-up from the 2020 scale-back in supply and shipping
  • the earlier lockdowns in 2020 which postponed home purchases
  • record-low mortgage interest rates
  • the availability of increased savings and global home building stimulus'

Home is where the heart is, now more than ever before.

In Australia, the Federal Government expected 27,000 applications for new home starts under the HomeBuilder scheme. More than 121,000 applications were received.  As a result, Australia-wide housing approvals are at record levels. According to HIA data, there was a 39% increase in total dwelling approvals from January to June 2021, compared to the same period last year, with the majority of that increase attributed to new houses.

Total Australian Dwelling Approvals, HIA August 2021

Jan - June 2021 Jan - June 2020 Variance %
Australia - Total Approvals 118,544 84,987 39.48%
Australia - Single Detached Houses 80,274 52,227 53.70%
Australian - Units or Townhouses 38,270 32,760 16.82%

 

The timber supply situation in Australia

Every Australian merchant continues to struggle to secure enough timber volume from both overseas and local producers and distributors.

  • Local timber production does not meet local demand, even in usual conditions
  • Last year's bushfires and the significant losses to saw log supply have impacted local timber production capacity
  • With the global demand for timber (lumber in American terms) at an all-time high, overseas based pine suppliers are choosing to send their products to the US or other markets where they can get the higher price, leaving Australia short
  • The surged demand for timber has resulted in ongoing notifications of price increases which continue to be received from building supply manufacturers
  • The demand-supply imbalance cannot be resolved easily
  • No-one knows exactly when this huge spike in building work will drop. But, it will come with time
  • FWPA, ABS, derived and Data Analyst Advisory Group IndustryEdge source shared this: "Our view is that the pipeline will take at least one year to build out, assuming everything goes back to normal on the demand side and the supply side continues to build flat out. In reality, with building industry lockdowns, supply chain disruptions and so on, we can expect the pipeline will take until at least the end of 2022 to be built out"
  • As housing starts slow down, the pressure of the supply imbalance will decrease
  • This pandemic has created the need for many businesses, across a broad range of industries, to prioritise limited supply to existing, loyal customers. Dahlsens too will continue to follow this strategy until such a time when supply is not challenged
  • The long-standing relationships Dahlsens has built over time with suppliers aim to withstand the inherent cycles of the building industry, even this unprecedented time.  It is true that these business partnerships have strengthened our supply position
  • The key timber suppliers to Dahlsens, two of Australia's largest framing timber producers, Timberlink and Hyne Timber, continue to honour priority supply, fast-tracking investments and innovations, working around the clock to further improve efficiencies, create access to additional resources and increase timber production to meet demand
  • Price increases, whilst debilitating, are limiting Australian softwood timber from being exported, which is protecting supply for local building.  2.5% of our softwood production is being exported, according to the Forest and Wood Products Australia, see graph below, of which is largely low-grade, non-structural product used to make products such as furniture and pallets.

 

  • The pandemic has shone the spotlight on the value of local manufacturing, and we are an industry with a high level of Australian manufacturing.  Dahlsens has strong supply relationships with the likes of Corinthian Doors, Rinnai, James Hardie, Laminex, Gyprock, Boral, and many more that manufacture right here on our shores, supporting local jobs and the Australian economy

Where to from here for builders regarding timber supply, a recommendation....

  1. Conservatively plan for delays as well as price increases in projects
  2. Provide suppliers with as much advance notice as possible of building supply needs
  3. Keep suppliers up to date with project requirements, as accurately as possible, so that customers jobs' can be prioritised in order of requirements to site. Communication is more important than ever
  4. Plan for the time when there is a decrease in consumer demand for new housing

In the news: 50 containers of Aussie bound timber abandoned in China

Five hundred homes worth of timber destined for Melbourne has been abandoned at a Shanghai dock because a shipping company accepted a lucrative offer to divert course to Los Angeles. Source: The Age, The Hardware Journal.

The Master Builders Association of Victoria (MBAV) said 50 containers carrying timber had been dumped in China and warned the incident could worsen Australia’s timber shortage and lead to unfinished homes.

The shipment of European timber arrived in Shanghai in late July. The shipping company was then offered 60% more to use its shipping containers, according to the MBAV, prompting the ship to dump the timber at the Chinese port and leave for the US with new goods on board. It is unclear how the company was able to take this action, given it had a contract to deliver the goods to Australia.

 

Note, not one of Dahlsens' suppliers, but another challenge for global supply.

Article from 18 August 2021 TimberBiz  READ MORE

Report: HIA New Home Sales Current Update 

  • Demand for detached housing remains robust. Low interest rates and changes in consumer preference for location of housing have been the major drivers for activity following the end of HomeBuilder
  • ABS Housing Finance data and Approvals data indicate that the bulk of projects initiated by HomeBuilder have cleared the final regulatory hurdles. There is now a record number of homes under construction across the country
  • Despite national new home sales declining by 20.5 per cent in July compared to the previous month, with lockdowns in multiple states having restricted trading and eroded confidence, new home sales for the last three months remain 4.3 per cent higher than in the same period in 2018. This suggests a solid amount of building activity is still entering the pipeline, following the end of the HomeBuilder

Excerpt from the July edition of HIA New Home Sales Report (Monthly). READ MORE

In the news: Melbourne population falls 32,000, State's housing boom rolls on

More than 32,000 Melburnians quit the city in the 12 months to March, the highest number to leave any Australian capital during this period of time.

Australian Bureau of Statistics figures to March show 18,000 of those left the state, the majority of these leaving for Queensland, South Australia and Western Australia.

The remaining 14,000 moved to regional Victoria.

Article from 3 August 2021 realestate.com.au. READ MORE

In the news: Queensland tops the housing scorecard

Queensland has been propelled to the top of HIA’s Housing Scorecard for the first time since 2007.  The HIA Housing Scorecard report presents analysis which ranks each of the eight states and territories based on the performance of 13 key residential building indicators, including detached and multi-unit building activity, renovations, housing finance, and rates of overseas and interstate migration.

“With building activity booming across the economy it is difficult to pick just one jurisdiction that is outperforming the pack. Even in this strong market, Queensland has made the most of its opportunities,” HIA economist Tom Devitt said.

“Interstate migration has offset some of the loss of overseas migration in Queensland, unlike other east coast states.

“More than twice the number of interstate migrants are heading to Queensland than the average of the past decade. Other states have also seen a rise in interstate migration but none as strong as Queensland,” he said.

“The biggest mover has been Western Australia having jumped from the bottom of the table into fifth place in less than a year,” Mr Devitt said.

“The exodus of residents from Western Australia that has occurred for several years has been reversed and there are encouraging signs that the multi-unit market might also pick up.”

Article from 9 August 2021 TimberBiz  READ MORE

In the news: What the 2032 Olympic Games means for Brisbane property market?

The Olympics should work as a positive influence on Brisbane housing market conditions, however, with the Games still some eleven years away, the flow on effects are likely to be gradual and centred around significant infrastructure upgrades and the associated medium-term uplift in jobs and longer-term improvements in transport efficiency.

The most significant positive influence on the housing market is likely to be seen in the years leading up to the Olympics, rather than during the four weeks of the Olympic and Paralympic games themselves.

Article from 22 July Core Logic READ MORE

In the news:  Construction Industry A $360bn House of Cards

Australia’s construction industry is a $360-billion house of cards teetering in a profitless boom in which builders big and small are going bust—and warnings from its coalface indicate the worst is yet to come.

According to industry leaders, long-established cracks in the sector’s foundation are now so wide that it is “totally unsustainable” and in need of urgent major reform if it is to have the capacity to build projects that need to be built.

Up to 25 per cent of all insolvencies in Australia are companies within the construction industry.

“It’s a bit of a shocking statistic,” says Australian Constructors Association (ACA) chief executive Jon Davies. “Particularly when you look at it in terms of the industry’s contribution to the economy (8 to 10 per cent of GDP) it’s a disproportionately high level.

“At the moment you are hearing a lot of people talking about a ‘profitless boom’ and it has been a reality.”

“But the bigger issue is not so much the profit margins, it’s the willingness of our industry to accept risks that they really aren’t able to quantify, and they really shouldn’t be trying to, from clients that are more than happy to try to pass those risks onto them."

Article from 2 July 2021 The Urban Developer READ MORE

In the news: Victoria introduces anti-wage theft laws that could see companies fined more than $1 million

Companies that deliberately underpay workers could face fines of more than $1 million under new wage theft laws coming into effect in Victoria [July 1 2021].

Individuals who deliberately underpay staff or dishonestly withhold wages could face up to 10 years' jail, or fines over $200,000. For companies, the possible fine can be as high as $1,090,000.

Article from 1 July 2021 ABC News  READ MORE 

                                                                                                     

Dwelling Approvals Victoria and New South Wales, HIA August 2021

Location Greater Sydney Greater Melbourne
Dwelling Type Total Dwelling Single
Detached House
Unit/
Townhouse
Total Dwelling Single
Detached House
Unit/
Townhouse
Jul-20 3,184 1,406 1,778 4,304 2,593 1,711
Aug-20 2,224 1,353 871 4,210 2,348 1,862
Sep-20 2,444 1,445 999 4,639 2,491 2,148
Oct-20 3,699 1,390 2,309 3,950 2,491 1,459
Nov-20 3,789 1,372 2,417 3,478 2,319 1,159
Dec-20 2,992 1,414 1,578 3,201 2,126 1,075
Jan-21 2,654 998 1,656 2,454 1,682 772
Feb-21 3,137 1,428 1,709 4,068 2,691 1,377
Mar-21 4,117 1,580 2,537 5,601 3,227 2,374
Apr-21 4,841 1,691 3,150 4,025 3,079 946
May-21 4,566 1,955 2,611 4,336 2,896 1,440
Jun-21 3,280 1,444 1,836 5,370 3,036 2,334

 

Even though Victoria has been experiencing a mass-exodus, the housing starts numbers for June continue to hover around their peak with 6950 new dwellings getting the green light.  New South Wales on the other hand, saw a sharp decline in June, down from 6347 to 5003.

In the capitals,  Sydney approvals have also dropped significantly in June down 39% from May 2021, while Melbourne rose 19.26%.

In the Victorian regional areas, the municipals leading the way for June 2021 vs June 2020 increases were Latrobe Valley (150%), Baw Baw (142%), Surf Coast + Bellarine Peninsula (140%) and South West Gippsland (96%).

In New South Wales the standouts were Wyong (up 64 houses from 0), Central Coast (327%), Dubbo (200%) and Taree - Gloucester (189%).

Overall for Australia, this is the third month in a row that total dwelling approvals have dropped.

"Since the unwinding of stimulus measures, approvals for private houses have fallen 20.9 per cent from the record high in April. Despite the fall, private house approvals remain at elevated levels and are 44.3 per cent higher than June 2020 and 37.6 per cent higher than June 2019," said Daniel Rossi, ABS Director of Construction Statistics. 

 

Housing Approvals data provided by HIA, August 2021

(scroll down the lists below to find all regions in Victoria and New South Wales)

Vic and NSW - Single Detached Houses Approvals 

 

Locations State June 2021 June 2020 % Difference Rolling
12 Months
Previous Rolling
12 Months
% Difference
Victoria VIC 4511 3136 43.85% 47742 36255 31.68%
Greater Melbourne VIC 3036 2145 41.54% 30979 25305 22.42%
Ballarat VIC 136 118 15.25% 1966 1169 68.18%
Baw Baw VIC 109 45 142.22% 948 619 53.15%
Bendigo VIC 122 128 -4.69% 1606 1187 35.30%
Campaspe VIC 5 15 -66.67% 235 162 45.06%
Geelong VIC 259 194 33.51% 2510 1646 52.49%
Gippsland - East VIC 55 35 57.14% 533 326 63.50%
Gippsland - South West VIC 102 52 96.15% 1145 688 66.42%
Grampians VIC 11 14 -21.43% 231 142 62.68%
Latrobe Valley VIC 65 26 150.00% 606 296 104.73%
Melbourne - Inner East (Boroondara, Manningham, Whitehorse) VIC 55 63 -12.70% 664 682 -2.64%
Melbourne - Inner South (Bayside, Glen Eira, Kingston, Stonnington - East) VIC 47 63 -25.40% 592 715 -17.20%
Melbourne - Inner suburbs VIC 26 31 -16.13% 331 349 -5.16%
Melbourne - North East (Banyule, Darebin - North, Kinglake, Whittlesea) VIC 438 278 57.55% 4013 3275 22.53%
Melbourne - North West (Keilor, Macedon Ranges, Moreland - North, Sunbury, Tullamarine) VIC 372 279 33.33% 4446 3655 21.64%
Melbourne - Outer East (Knox, Manningham, Maroondah, Whitehore - East, Yarra Ranges) VIC 75 82 -8.54% 1151 1048 9.83%
Melbourne - South East (Cardinia, Casey-North, Casey-South, Dandenong, Monash) VIC 603 526 14.64% 6307 4952 27.36%
Melbourne - West (Brimbank, Hobsons Bay, Maribyrnong, Melton - Bacchus Marsh, Wyndham) VIC 1351 760 77.76% 12558 9681 29.72%
Mildura VIC 27 15 80.00% 390 230 69.57%
Mornington Peninsula - Frankston VIC 69 63 9.52% 917 948 -3.27%
Murray River - Swan Hill VIC 17 9 88.89% 170 92 84.78%
Shepparton VIC 40 23 73.91% 584 364 60.44%
Surf Coast - Bellarine Peninsula VIC 207 86 140.70% 2035 1421 43.21%
Upper Goulburn Valley VIC 51 34 50.00% 538 431 24.83%
Wangaratta - Benalla VIC 27 25 8.00% 344 220 56.36%
Warrnambool VIC 30 24 25.00% 428 289 48.10%
Wellington VIC 25 15 66.67% 377 222 69.82%
Wodonga - Alpine VIC 72 55 30.91% 834 489 70.55%
New South Wales NSW 2634 2074 27.00% 30062 24193 24.26%
Greater Sydney NSW 1444 1223 18.07% 17476 14422 21.18%
Albury NSW 44 33 33.33% 652 412 58.25%
Bathurst NSW 23 21 9.52% 323 239 35.15%
Central Coast NSW 94 22 327.27% 981 675 45.33%
Coffs Harbour NSW 29 20 45.00% 384 269 42.75%
Dapto - Port Kembla NSW 28 24 16.67% 427 316 35.13%
Dubbo NSW 33 11 200.00% 396 191 107.33%
Gosford NSW 30 22 36.36% 311 320 -2.81%
Goulburn NSW 37 17 117.65% 273 148 84.46%
Griffith NSW 7 5 40.00% 132 109 21.10%
Kiama - Shellharbour NSW 55 31 77.42% 558 383 45.69%
Lake Macquarie NSW 126 85 48.24% 938 790 18.73%
Lower Hunter NSW 104 60 73.33% 917 621 47.67%
Maitland NSW 81 71 14.08% 870 994 -12.47%
Newcastle NSW 25 42 -40.48% 354 355 -0.28%
Orange NSW 35 25 40.00% 260 239 8.79%
Port Macquarie NSW 49 31 58.06% 402 361 11.36%
Port Stephens NSW 27 19 42.11% 267 187 42.78%
Rest of NSW NSW 1190 851 39.84% 12586 9771 28.81%
Richmond - Tweed NSW 90 73 23.29% 910 831 9.51%
Shoalhaven NSW 41 55 -25.45% 620 465 33.33%
South Coast - Batemas Bay, Bega, Merimbula NSW 32 36 -11.11% 431 337 27.89%
Southern Highlands NSW 17 6 183.33% 211 216 -2.31%
Sutherland NSW 34 17 100.00% 314 187 67.91%
Sydney - Baulkham Hills and Hawkesbury NSW 100 141 -29.08% 2148 1787 20.20%
Sydney - Blacktown NSW 352 294 19.73% 3455 2840 21.65%
Sydney - City and Inner South NSW 15 8 87.50% 121 86 40.70%
Sydney - Eastern Suburbs (Bondi, Coogee, Randwick) NSW 11 16 -31.25% 124 179 -30.73%
Sydney - Inner South West (Bankstown, Cantebury, Hurtsville) NSW 96 68 41.18% 1017 1007 0.99%
Sydney - Inner West (Canada Bay, Leichhardt, Strathfield) NSW 29 20 45.00% 294 227 29.52%
Sydney - North Sydney (Chatswood, Hornsby, Mosman) NSW 58 44 31.82% 502 489 2.66%
Sydney - Northern Beaches (Manly, Pittwater, Warringah) NSW 26 26 0.00% 435 351 23.93%
Sydney - Outer South West (Camden, Campbelltown, Wollondilly) NSW 142 180 -21.11% 2120 1812 17.00%
Sydney - Parramatta NSW 67 63 6.35% 875 722 21.19%
Sydney - Penrith, Richmond, Blue Mountains NSW 78 99 -21.21% 1028 984 4.47%
Sydney - Ryde NSW 32 17 88.24% 240 201 19.40%
Sydney - South West (Bringelly, Fairfield, Liverpool) NSW 310 208 49.04% 3822 2875 32.94%
Tamworth NSW 31 12 158.33% 304 180 68.89%
Taree - Gloucester NSW 55 19 189.47% 317 209 51.67%
Wagga Wagga NSW 42 20 110.00% 533 382 39.53%
Wollongong NSW 18 31 -41.94% 239 215 11.16%
Wyong NSW 64 0 670 355 88.73%
Australian Capital Territory ACT 125 90 38.89% 1491 1233 20.92%

Vic and NSW - Units and Apartment Approvals 

Locations State June 2021 June 2020 % Difference Rolling
12 Months
Previous Rolling
12 Months
% Difference
Victoria VIC 2439 1492 63.47% 19926 23760 -16.14%
Greater Melbourne VIC 2334 1403 66.36% 18657 22824 -18.26%
Ballarat VIC 6 4 50.00% 188 79 137.97%
Baw Baw VIC 2 0 48 27 77.78%
Bendigo VIC 2 4 -50.00% 23 73 -68.49%
Campaspe VIC 0 0 8 5 60.00%
Geelong VIC 44 17 158.82% 355 339 4.72%
Gippsland - East VIC 0 0 8 0
Gippsland - South West VIC 0 7 -100.00% 38 34 11.76%
Grampians VIC 2 2 0.00% 26 7 271.43%
Latrobe Valley VIC 0 35 -100.00% 20 50 -60.00%
Melbourne - Inner East (Boroondara, Manningham, Whitehorse) VIC 290 106 173.58% 2414 2659 -9.21%
Melbourne - Inner South (Bayside, Glen Eira, Kingston, Stonnington - East) VIC 287 129 122.48% 2820 1702 65.69%
Melbourne - Inner suburbs VIC 340 557 -38.96% 4258 9075 -53.08%
Melbourne - North East (Banyule, Darebin - North, Kinglake, Whittlesea) VIC 234 164 42.68% 1666 1912 -12.87%
Melbourne - North West (Keilor, Macedon Ranges, Moreland - North, Sunbury, Tullamarine) VIC 93 91 2.20% 979 1228 -20.28%
Melbourne - Outer East (Knox, Manningham, Maroondah, Whitehore - East, Yarra Ranges) VIC 138 93 48.39% 1153 1327 -13.11%
Melbourne - South East (Cardinia, Casey-North, Casey-South, Dandenong, Monash) VIC 223 120 85.83% 1813 1950 -7.03%
Melbourne - West (Brimbank, Hobsons Bay, Maribyrnong, Melton - Bacchus Marsh, Wyndham) VIC 655 121 441.32% 3070 2418 26.96%
Mildura VIC 0 4 -100.00% 25 12 108.33%
Mornington Peninsula - Frankston VIC 74 22 236.36% 484 553 -12.48%
Murray River - Swan Hill VIC 0 0 13 9 44.44%
Shepparton VIC 0 0 38 16 137.50%
Surf Coast - Bellarine Peninsula VIC 8 16 -50.00% 219 204 7.35%
Upper Goulburn Valley VIC 4 0 23 24 -4.17%
Wangaratta - Benalla VIC 10 0 50 4 1150.00%
Warrnambool VIC 2 0 95 10 850.00%
Wellington VIC 8 0 19 7 171.43%
Wodonga - Alpine VIC 0 0 8 4 100.00%
New South Wales NSW 2369 1160 104.22% 28706 23757 20.83%
Greater Sydney NSW 1836 924 98.70% 23451 18974 23.60%
Albury NSW 0 2 -100.00% 27 47 -42.55%
Bathurst NSW 4 2 100.00% 44 84 -47.62%
Central Coast NSW 21 19 10.53% 344 446 -22.87%
Coffs Harbour NSW 21 0 107 70 52.86%
Dapto - Port Kembla NSW 6 6 0.00% 168 190 -11.58%
Dubbo NSW 18 8 125.00% 76 73 4.11%
Gosford NSW 4 19 -78.95% 214 273 -21.61%
Goulburn NSW 5 12 -58.33% 72 91 -20.88%
Griffith NSW 0 2 -100.00% 16 12 33.33%
Kiama - Shellharbour NSW 31 28 10.71% 540 454 18.94%
Lake Macquarie NSW 82 12 583.33% 360 453 -20.53%
Lower Hunter NSW 20 8 150.00% 120 46 160.87%
Maitland NSW 11 28 -60.71% 399 251 58.96%
Newcastle NSW 166 32 418.75% 810 1260 -35.71%
Orange NSW 9 4 125.00% 83 35 137.14%
Port Macquarie NSW 13 12 8.33% 266 142 87.32%
Port Stephens NSW 4 0 319 36 786.11%
Rest of NSW NSW 533 236 125.85% 5255 4783 9.87%
Richmond - Tweed NSW 40 43 -6.98% 351 328 7.01%
Shoalhaven NSW 3 8 -62.50% 245 305 -19.67%
South Coast - Batemas Bay, Bega, Merimbula NSW 8 4 100.00% 115 39 194.87%
Southern Highlands NSW 43 0 197 22 795.45%
Sutherland NSW 93 25 272.00% 1163 918 26.69%
Sydney - Baulkham Hills and Hawkesbury NSW 20 6 233.33% 1401 431 225.06%
Sydney - Blacktown NSW 367 20 1735.00% 3155 1563 101.86%
Sydney - City and Inner South NSW 29 2 1350.00% 2778 1382 101.01%
Sydney - Eastern Suburbs (Bondi, Coogee, Randwick) NSW 26 12 116.67% 433 463 -6.48%
Sydney - Inner South West (Bankstown, Cantebury, Hurtsville) NSW 318 170 87.06% 2309 3306 -30.16%
Sydney - Inner West (Canada Bay, Leichhardt, Strathfield) NSW 397 80 396.25% 1328 1080 22.96%
Sydney - North Sydney (Chatswood, Hornsby, Mosman) NSW 123 22 459.09% 1113 910 22.31%
Sydney - Northern Beaches (Manly, Pittwater, Warringah) NSW 168 82 104.88% 458 206 122.33%
Sydney - Outer South West (Camden, Campbelltown, Wollondilly) NSW 40 19 110.53% 706 856 -17.52%
Sydney - Parramatta NSW 92 247 -62.75% 4408 3861 14.17%
Sydney - Penrith, Richmond, Blue Mountains NSW 8 29 -72.41% 663 626 5.91%
Sydney - Ryde NSW 105 8 1212.50% 1892 1515 24.88%
Sydney - South West (Bringelly, Fairfield, Liverpool) NSW 29 183 -84.15% 1300 1411 -7.87%
Tamworth NSW 6 10 -40.00% 51 69 -26.09%
Taree - Gloucester NSW 2 2 0.00% 18 70 -74.29%
Wagga Wagga NSW 2 0 51 34 50.00%
Wollongong NSW 10 7 42.86% 488 481 1.46%
Wyong NSW 17 0 130 173 -24.86%
Australian Capital Territory ACT 200 293 -31.74% 3584 3689 -2.85%

Design by MOO Marketing