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Australia is experiencing a residential building boom

Aerial view of construction work and housing in Western Sydney. Source: Getty

Australians are spending big on building.

Australia is experiencing a residential building boom driven by record low interest rates and the home builder grant.

But demand for construction materials is outstripping supply, leaving consumers with longer and more expensive waits to get their home improvements done.

Builder Jonathan Hayes is renovating a home in Sydney's west and timber is essential for the job. 

But he says an order made for wood three weeks ago has only just arrived today.

Blacktown building supplier Phillip Screpis is ordering timber...that never comes and if it does will cost 50 percent more.

For now, builders like Jonathan Hayes are absorbing the cost in existing contracts - but that will change for new builds.

Australians are spending big on building.

The cost of renovations has increased almost 11 per cent in the March quarter to 2.84 billion dollars.

Construction work rose in four states and territories in the March quarter.

NSW and the ACT were up by 3.6 per cent. While South Australia and Western Australia had the biggest increases in more than three years with work up by more than nine per cent.

Economist Shane Oliver says the industry is helping Australia recover from the COVID-19 downturn.

Shane Oliver says the 25-thousand-dollar Home Builder grant and interest rates of point one of a percent are driving construction, as well as working from home during the pandemic:

But those in the building industry aren't so confident of a quick return to price stability, fearing it will take more than year for supplies to be able to match soaring demand.

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