Source: Townsville Bulletin
There has been many articles written on the topic of rising prices of steel recently. In particular there has been much talk about the government's 2030 plan which would see the construction of more residential dwellings and activity centres across Melbourne put on the back burner due to property developers being unable to cover costs and consumers not willing to pay extra for homes in suburbs zoned for high-density development.
The article that I am posting talks about the effects of steel prices on the builders themselves and the lack of certainty as to whether this is the calm before the storm.
The interesting thing about this situation for me is what people are going to do about it. If costs continue to rise then the use of steel is going to become less and less feasible. There have been talks about reducing waste, which is an obvious course of action but it will not minimise the costs in a substantial enough way, especially if prices continue to go up. There have also been talks about using less steel in the
average home which opens up the
opportunities for other materials to be used, such as timber. It will be interesting to see how long it takes for the industry to start looking at alternative options in order to cut back on the costs that have a stranglehold, particularly on residential builders.
The article:The building industry is bracing itself for for more hikes in the cost of steel which could add up to $15,000 to the cost of an average home.
Suppliers such as OneSteel are holding `information sessions' with clients at present to warn them of the impending increases.
However, what has builders worried is that no one can guarantee just exactly what the price will be in six or 12 months time as used to be the case...
To read the article in full click on the link below:
http://www.townsvillebulletin.com.au/article/2008/05/28/13425_hpbus.html