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Carter Holt Harvey proposes 5-7% timber price rises in October but biggest builder hits back
Carter Holt Harvey proposes 5-7% timber price rises in October but biggest builder hits back

NZ Herald

time17-07-2025

  • Business
  • NZ Herald

Carter Holt Harvey proposes 5-7% timber price rises in October but biggest builder hits back

Ellie and Grant Porteous of G.J. Gardner Homes own the master franchise for the national house-building business via their Deacon Holdings. Photo / Grant Porteous He said the rise was entirely justifiable due to input cost increases. He cited labour costs, but other factors too. Porteous was talking to Herald NOW host Ryan Bridge today about house construction costs and new home prices. 'Despite this price stability, we're pushing back on some of the supply chains. We do have some comfortable duopolies in supply that are wanting to put prices up and, I'll be honest, one of those is Carter Holt Harvey with timber, and we're saying 'no'. 'The consumer can't sustain that at this moment. We don't see that your input costs have increased. You need to hold your prices for the good of New Zealanders and our industry at the time.' Carter Holt Harvey proposes timber price rises. Asked what response came from Carter Holt Harvey, Porteous said his business was awaiting that. 'It's a live debate and negotiation, but I think all builders need to have the confidence to be able to challenge any suppliers. What are these input costs that have gone up?' Porteous cited the housing downturn as having an effect on businesses like his. 'You'll never build cheaper than you will today,' he said, referring to the house sales downturn and land prices not rising at the levels they had been. 'The cost of building a home isn't our supply chain or manufacturers. It's more bureaucracy, red tape, councils, and honestly, MBIE [Ministry of Business, Innovation and Employment] at times over-reaching with the building code.' Staff at the national chain of Carter's retail outlets are telling builders of the planned price rises. The directive has come from the head office. Rotorua-headquartered Red Stag Timber is the other dominant timber supplier in New Zealand. Denver Simpson, Carter Holt Harvey's general counsel and company secretary, said he had no comment on the timber price rises. Rotorua-headquartered Red Stag Timber is the other dominant force in the sector in New Zealand. Red Stag says it employs about 300 staff and has an annual revenue of more than $220 million. It was established in 2003 to operate the Waipā Mill, in Waikato, which was founded by the Government in 1939 and then privatised in 1996. Carter Holt Harvey is privately owned by Rank Group, owned by one of the country's wealthiest men, Graeme Hart. Graeme Hart's Rank owns Carter Holt Harvey. Photo / Getty Images CoreLogic's Cordell Construction Cost Index out this month showed a growth rate of 0.6% for the three months to June, for an annual rate of 2.7%, the strongest since the third quarter of 2023. At the peak of the pandemic, building costs surged 10.4% and the long-term average was 4.2%. Spare capacity had since increased in the sector as the number of houses being built fell sharply from more than 50,000 to around 33,000 annually. The report showed varying price moves among key materials, with weatherboard 6% higher but decking timber and ceiling insulation 1% cheaper. The index is based on the cost of building a standard single-storey, three-bedroom house with two bathrooms, in brick and tile. Anne Gibson has been the Herald's property editor for 25 years, written books and covered property extensively here and overseas.

Rising cost to build a wake-up call on housing dream
Rising cost to build a wake-up call on housing dream

The Advertiser

time15-07-2025

  • Business
  • The Advertiser

Rising cost to build a wake-up call on housing dream

A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said.

Rising cost to build a wake-up call on housing dream
Rising cost to build a wake-up call on housing dream

Perth Now

time15-07-2025

  • Business
  • Perth Now

Rising cost to build a wake-up call on housing dream

A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said.

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