There are fears the situation will make building a home even more expensive in 2026, further threatening the Australian government’s pledge to build 1.2 million homes over five years.<\/p>\n
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Andrew Skinner owns a quarry near Sydney that supplies fatty sand for bricklaying. (ABC News: John Gunn)<\/p>\n
“The last time we had an impact like this was the beginning of COVID,” one supplier of building materials, Andrew Skinner, told the ABC.<\/p>\n
“We’ve got this sudden price increase. A great deal of uncertainty on supply and pricing.”<\/p>\n
Mr Skinner owns a quarry near Sydney that supplies “fatty sand” for bricklaying. The off-grid site churns through diesel, representing about 20 per cent of its overheads.<\/p>\n
Diesel and petrol prices are surging globally as Iran chokes the crucial Strait of Hormuz passage, which delivers about 20 per cent of the world’s crude oil.<\/a><\/p>\n With no end to the war in sight, Somersby Sands has decided to introduce a “fuel surcharge” for its buyers, effective from March 17.<\/p>\n Currently, that is working out to an extra $1.50 charge on every $28 tonne of sand sold by Somersby, representing a price rise of more than 5 per cent.<\/p>\n “If we bear the whole cost of the increase in the fuel, it’s going to make a massive impact on our profitability,” Mr Skinner said.<\/p>\n Bradley Vagg owns a building company in central Victoria. (ABC News: Scott Jewell)<\/p>\n It is not just sand. Central Victorian builder Bradley Vagg has been receiving immediate fuel surcharge notifications from his suppliers, including for concrete, bricks and roof flashings.<\/p>\n “Anything that pretty much comes on a truck and needs to be freighted to site has gone up in price due to the fuel,” he said.<\/p>\n “We sort of have no choice. They have what we want, and if we’re not willing to pay the increase, then they just won’t bring it to site.”<\/p>\n Loading<\/p>\n Mr Vagg said the costs would hit their profitability on fixed-priced contracts. He said they had asked clients for help absorbing the unexpected costs.<\/p>\n “[We’ve gone to them] pretty much cap in hand and asking for a favour,” he said.<\/p>\n “We are implementing [these price rises] into our contracts moving forward.”<\/p>\n An example of the sorts of “emergency” fuel levies tradespeople are being asked to pay on materials.<\/p>\n Pipe industry hit particularly hard<\/p>\n Builders and developers could face specific issues with plumbing and ground works, with the industry that supplies underground pipes finding itself in a particularly fraught position.<\/p>\n Asian manufacturers that rely on crude oil to make petrochemicals are declaring “force majeure”, according to Reuters, as they face the same supply concerns as users of diesel.<\/p>\n Higher oil costs set to spike prices well beyond the fuel pump<\/a><\/p>\n Higher oil prices from the war in the Middle East are not only increasing fuel costs, but prices for key chemicals as well.<\/p>\n Force majeure means that, due to extraordinary circumstances, parties to a contract can break existing contracts and raise prices significantly.<\/p>\n This impact is being felt downstream at Australian companies that need PVC and resin to manufacture and distribute pipes and fittings for plumbing.<\/p>\n ABC News has seen letters from several piping companies to their customer database, warning that quoted prices will soon be invalid and will go up in April.<\/p>\n “Spot PE resin pricing for April 2026 delivery is up approximately 40 per cent compared with March,” a letter signed by Polypipe’s boss notes.<\/p>\n Polypipe did not reply to queries from ABC News.<\/p>\n Do you know more about price and supply issues in residential construction? Email our journalist confidentially on terzon.emilia@abc.net.au<\/a> or em.terzon@proton.me<\/a><\/p>\n The boss of another company, Vinidex, which is a manufacturer and supplier of advanced pipe systems, confirmed the price rises in a statement to ABC News, noting the “unprecedented disruption to our upstream supply chain”.<\/p>\n “We have advised our customers that we expect considerable disruption to our supply capability over the coming weeks and months,” Marc Blampied added.<\/p>\n The chaos could ripple even further, with the residential building industry warning about rising freight costs on materials that need to be imported.<\/p>\n Loading…<\/p>\n “Builders are now looking for alternative routes for product coming particularly out of Europe,” Master Builders CEO Denita Wawn said.<\/p>\n “In one instance, we’ve heard of a tenfold increase in the freight costs between shipping and air freight. So it feels like COVID.”<\/p>\n Is this like COVID?<\/p>\n The building industry was particularly impacted by supply shocks during the pandemic, with noticeable spikes in the cost of residential construction in 2021 and 2022.<\/p>\n That was as freight and import costs rose with the world at a standstill, and then locally as demand for new homes surged in Australia during the HomeBuilder stimulus era.<\/p>\n A national index that tracks residential construction costs \u2014 from the supplies to the trade \u2014 shows the overall cost of building a home is 35.4 per cent higher today than in late 2019.<\/p>\n Cotality’s head of research, Gerard Burg, expects the fresh Middle East war price hikes to show up in its Cordell Construction Cost Index from the second quarter, which starts in April.<\/p>\n “It is going to be relatively significant when it does come through,” he said.<\/p>\n Loading…<\/p>\n Mr Burg said a COVID-era supply and price shock would likely take more than the current issues being created by the war in the Middle East.<\/p>\n “That scenario would require major physical shortages of fuel, really limiting the capacity of goods to be moved around the country,” he said.<\/p>\n “It’s not apparent whether that will be the case yet.”<\/p>\n Yet, Mr Burg said the situation would likely push up the cost of building a home, at a time when the Australian government was pledging to build 1.2 million homes in five years.<\/p>\n “It makes the feasibility of any construction project more challenging right now,” he said.<\/p>\n “We’ve seen the target gets further and further out of reach each month as home completions have fallen short of the monthly target you’d need to reach those 1.2 million homes.<\/p>\n “It was already a challenging target, and anything that puts further barriers to the construction industry is only going to push further out of reach.”<\/p>\n Consumers likely to pay more to build<\/p>\n Master Builders’ Denita Wawn shared similar concerns about the federal government’s housing targets, and what the latest supply chain shocks would do to the price of the Australian dream.<\/p>\n Denita Wawn says there will be price increases. (ABC News: Stuart Carnegie)<\/p>\n Ms Wawn said many builders with fixed-price contracts would have to absorb extra costs for now, but the supply-chain shock was looming.<\/p>\n “Early indicators are showing that we will, and have seen, price increases,” she said.<\/p>\n “The question will be: Is it a short, sharp spike or is it something that is going to be long-lasting that would have a significant detrimental impact on inflation?<\/p>\n “Housing has been the leader of inflationary costs over the past 12 months or so. This will only exacerbate that situation.”<\/p>\n The Reserve Bank of Australia has already been hiking interest rates to tackle resurging inflation in 2026, which will also add to the costs for everyday Australians borrowing to build a home.<\/p>\n The federal Housing Minister Clare O’Neil met with industry CEOs last week to discuss “housing supply chain pressures arising from the conflict in the Middle East”, a spokesperson said.<\/p>\n “[This] week, Minister O’Neil will again meet with leaders from the building and construction sector to continue to discuss supply chain implications.<\/p>\n “The government is monitoring the situation and continuing to engage with industry and Treasury on potential impacts.”<\/p>\n Loading…Loading…<\/p>\n","protected":false},"excerpt":{"rendered":"Alarm bells are ringing in Australia’s residential building industry, with some describing “considerable” supply chain disruption and price…\n","protected":false},"author":2,"featured_media":539663,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[241640,28,16422,101,241641,203869,2402,227834,139727,236727,241639],"class_list":["post-539662","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-building-industry","tag-business","tag-contracts","tag-economy","tag-force-majeure","tag-gas-crisis","tag-inflation","tag-middle-east-war","tag-oil-and-gas-industry","tag-oil-crisis","tag-price-spikes"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/539662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=539662"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/539662\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/539663"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=539662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=539662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=539662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"a](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/03\/f828e7b1d93c2aa9f9f2ca37c4c8cbf7.jpeg\")
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