Timber Shortages for Home Building
Around 20 percent of timber used in the construction of detached homes from 2016 to 2019 was imported. Domestic production of timber has not kept pace with demand over the past two decades. In a typical year, this isn’t a problem as there are generally few constraints on the importation of timber to Australia.
Exposure to the deeper international market typically means that surges in demand for timber can be quickly accommodated by a rise in imports of timber. This situation changed in 2020 with the onset of the pandemic where constraints on international shipping emerged. The surge in demand for framing timbers also coincided with a surge in demand globally. This is limiting Australia’s ability to source timber from international markets at a competitive price.
Demand for timber is unprecedented
In 2021, it was anticipated that the number of new detached homes that commence construction in Australia will increase by 26.9 percent compared to the previous year. In addition, a boom in renovation work is adding to the large volume of building work underway.
Global prices for framing timber were recently at a record high but have started to decline due to improvements in the US market. Most developed and less developed economies are also experiencing a boom in demand for detached homes and renovations. It takes a number of months for timber production to increase to meet this rise in demand as additional milling capacity is commissioned. As a consequence, demand for timber has outstripped the capacity of timber producers globally.
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