Desperate builders who need to get work done are turning to online auctions for materials, resulting in some products selling for thousands of dollars above their retail price.
West Auckland sole trader builder Mike Glamuzina was sent Thing a screenshot of a Trade Me auction where bids for 26 sheets of Gib Cardboard had exceeded $5100. The same product normally goes on sale at Bunnings for $33.82 per sheet before any trade discounts apply, meaning the auction winner paid about six times the usual price.
“It made me laugh, but not in a good way,” Glamuzina said.
Another Trade Me auction saw bids on a stack of 50 wallboards exceed $6,000.
There is a nationwide shortage of building materials, particularly plasterboard, with Fletcher Building’s subsidiary, Winstone Wallboards, having stopped taking new orders until June.
Trade Me Market Manager Lisa Steward said there was “no doubt” the construction section of its site was showing the effects of supply chain shortages.
It saw a 19% year-over-year price increase across its building materials section.
Steward said list views in Trade Me’s drywall category “trended” higher than any other category on the site last month.
Lower Hutt builder Paul Taylor has run his own business for 16 years and says the building industry “seems to be imploding”.
“I have a small attached bathroom to start with and I need eight plasterboards, but I don’t know when I will be able to do it. I was basically kicked out.
Taylor thinks smaller construction companies can’t get supplies because big companies place big orders and stockpile materials.
“If you walk into any PlaceMakers in Wellington, they have thousands of plasterboard stacked up to the ceiling, but we’re told it’s already been sold.”
A spokesperson for PlaceMakers, which is also a subsidiary of Fletcher Building, said it was trying to address the storage issue by “redirecting orders where necessary.”
They said it was working on a “just-in-time” delivery model for plasterboard to reduce the length of time products are in storage before installation.
“Where sites are not ready to install, we redirect [plasterboard] to other releases ready to keep our supply chain moving.
They said a new allocation model to be introduced in July would also help solve the long-term problem, but it would take some time to resolve the backlog.
When asked if the allocation model would ensure steady supply for small businesses, PlaceMakers said, “We are actively working with all customers to ensure we can supply as much as possible during these difficult times.”
Thing also reached out to Carters’ relationship manager and chief marketing officer, but neither would comment on whether the allocation model would ensure supply for its customers.
Are you a builder who has proof of storage? Contact [email protected]
Meanwhile, the Commerce Commission is investigating whether “factors” may affect competition for the supply of key construction materials used in residential buildings.
In a document released earlier this year, the commission said Fletcher Building controls 94% of New Zealand’s plasterboard supply.
The commission invited the public to send submissions on the topics covered in the paper to [email protected] Its draft report is to be published in July this year.