‘Worse yet to come’ as builders brace for site reopening chaos

http://www.afr.com/property/residential/worse-yet-to-come-as-builders-brace-for-site-reopening-chaos-20210720-p58b8r

Sagie Kalush, owner of Rockwall Projects, which operates around Sydney’s eastern suburbs, said he was worried about the company’s projects being further delayed as it competes for materials and available tradies after the shutdown is lifted.

Sagie Kalush, owner of Rockwall Projects, says he’s worried about further delays caused by the skills and materials shortage. Roger Stonehouse

“Those two weeks will create a backlog of deliveries in materials and work, which means it would take some time for things to start running smoothly again,” he said.

“And what I’m afraid of, and I could actually see, is that the whole industry would be trying to book subcontractors on this date. So everyone will be scrambling around so they could get started on time.

“I’m expecting it would take at least six weeks before people will be able to fill the void that our industry suffered.”

Sydney builder Toby Searle, owner of Highwater Homes, agreed that the more devastating impact of the ban on construction sites was yet to come.

“I think the bigger impact will come when we open back up again,” he said.

“As builders, we all want our projects to start straight away when the ban is lifted, but I think we’ll be affected for weeks after that because tradies and suppliers are already in short supply.”

Mr Searle said even if the lockdown only lasted for two weeks, the negative impact would be felt for months to come.

These builders have multimillion-dollar projects in the pipeline and are struggling with less than $100 in the bank.

Russ Stephens, co-founder of the Association of Professional Builders

“I’d like to think we have fairly good relationships with our tradies, that we would be able to push them back for two weeks and get them on site after that, but I do know they have a lot of pressure from other builders, and other homeowners as well, and they’re also trying not to lose any time on their jobs,” he said.

“So we’re expecting delays across our projects which could last for weeks or months.”

Those delays could further exacerbate the cash flow crunch already being experienced across the sector, Russ Stephens, co-founder of the Association of Professional Builders, said.

Mick Mattarelli, of Mickey The Chippy Construction, says the sudden shutdown has put pressure on his cash flow. Dominic Lorrimer

“Nearly three in four small builders are experiencing cash flow crunch as a result of materials and skills shortages, which has been exacerbated by the construction shutdown,” he said.

“These builders have multimillion-dollar projects in the pipeline and are struggling with less than $100 in the bank, as supply shortages continue to stifle cash flow,” he said.

“They are already experiencing delays because of the shortage of materials, and the price increases in materials is destroying their profits, so this ban on construction activity is just another challenge that they have to contend with on top of all that.”

For carpenter Mick Mattarelli of Mickey The Chippy Construction, the fallout of the ban has had an immediate impact on his bottom line.

“I just outlayed $15,000 out of my pocket for the materials we ordered on Friday [before the ban] which I can’t use for at least two weeks, So we’re not just losing two weeks of work, we’re also losing money that I could have held on to if I had a bit more notice,” he said.

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