Release date: 20/05/2022

State Government has called for a review into increased building costs and their impact on housing affordability following growing price gouging concerns.

Minister for Housing and Urban Development Nick Champion has written to ask the Australian Competition and Consumer Commission (ACCC) to conduct the review and take a more active role in monitoring construction price materials.

Master Builders SA has also raised fears the rising price of building products will have a negative impact on the industry.

According to Australian Bureau of Statistics figures, building products rose by 3.8 per cent during the December quarter and are now 12 per cent higher than a year ago.

The increase has seen severe price hikes to building materials over the year to December 2021 including:

  • Reinforcing steel costs (an increase of 43.1 per cent)
  • Structural timber prices (an increase of 39.7 per cent)
  • Steel beams and sections (an increase of 24.8 per cent)
  • Plastic pipes and fittings (an increase of 24.7 per cent)

The rapid increase in pricing has seen home builders locked into fixed price contracts which is inconsistent with the current changing market with some even going into receivership.

Subsequently, disturbing allegations of predatory pricing and price gouging with suppliers and wholesalers taking advantage of short supply and increased demand have surfaced.


Quotes

Attributable to Minister for Housing and Urban Development Nick Champion

Providing certainty to South Australia’s building and construction industry is vital in ensuring their customers aren’t caught having to pay more or wait for longer for their builds.

I would welcome an intervention on behalf of the ACCC to investigate allegations of price gouging and the cost of materials in the sector.

Housing affordability is already under severe pressure, the last thing South Australians need is increased prices providing instability in the market.