Building advice: What can we do about the soaring cost of materials?

Homebuilder Kieran McCarthy says the cost of many products have been increasing steadily since late March, with many products going up 10-15% per month and rising

Some products that you would typically have been able to collect on a daily basis now need to be ordered weeks in advance. 

Hi Kieran, 

I have heard lately that building material costs are rising rapidly.

From a builder's perspective, what does this all mean if I am planning a renovation or extension.

Where are the costs rising most? What is the additional cost going to mean — a 10% increase or more?

Am I better off waiting for another few years to see if prices fall back?

Orla and Jim, Limerick 

Hi Orla and Jim, 

Thanks for this very topical question. Yes, I’m afraid there is very significant building material cost inflation under way at present. So how did this happen, what does it mean to the cost of your renovation or extension, and what can you do to offset this?

I have read up a little on this subject. In truth, before Covid-19 hit Europe, we were running a surplus in terms of building materials. At the time, if you remember, we were dealing with the onset of a potential ‘hard Brexit’. As such, many suppliers were stockpiling building materials in the fear that there might be major supply line issues on the way. 

As the Brexit saga continued and we eventually got a milder deal over the line, we were left with a significant stockpile of building material to draw down on as the pandemic swept through Ireland and beyond. 

During the first lockdown, this stockpile offset an increased demand on material due to home improvements and the eventual reopening of the building industry, so there was a general smoothing of the supply curve afterwards.

Kieran McCarthy.

However, the next major issue was the phase of winter lockdowns, which affected factories and saw mills particularly in Europe. They would normally have been building up a stock of material for the following spring (ie early 2021). Add the Suez Canal blockage and Britain formally leaving the EU in January and you have a perfect storm. The Irish building industry emerged from lockdown only to find that there was a massive shortage of key building materials.

The first product to be hit was building (‘rough’) timber. This is the ideal timber used in roofs, stud walls, trusses, door frames and the like. There are currently issues with both Irish and European timber supplies. There are also growing difficulties in Ireland relating to log harvesting. 

Next in line is insulation, much of which is manufactured in Europe. Also affected is steel and PVC, especially PVC drainage pipes, due to a shortage of a key raw material in the manufacturing process.

The cost of many of the building products above have been increasing steadily since late March, with many products going up 10-15% per month and rising. 

Some products that you would typically have been able to collect on a daily basis now need to be ordered weeks in advance. 

The next issue here is that builders are now beginning to purchase ahead and in bulk to hedge their bets and secure products at today’s prices, furthering demand.

When you consider how a building project is priced, it is generally labour, materials, plant and overheads. Most of a building project's costs would be labour and materials, so a very considerable portion of your build price could be affected. 

So what are your options?

You could argue that staying out of the market might work and you might get a much better deal later on, but I personally don’t think so. 

Most people planning an extension or renovation are building at a very busy time of their life and perhaps it is to provide space for a new or growing family. Anyway, I doubt there will be a materials price crash as the factories can control the supply to offset this, as it is in their interest.

It may be that you can afford to buy some of your materials a little earlier if you have access to a storage facility and hedge your bets. In any case, you will need to order in advance to ensure these materials are in place when your tradesmen need them. 

At least this will provide some certainty in otherwise uncharted waters as we sail into new post-pandemic seas. Check all the lead-in times of your key building components and order well in advance. As the saying goes, it’s better to be looking at it than looking for it.

• Civil engineer Kieran McCarthy is founder, and design and build director with KMC Homes. He is a co-presenter of the RTÉ show 'Cheap Irish Houses'.