The "toilet paper syndrome" has hit gib board, with some builders panic buying because they fear a shortage, a sector chief says.
New Zealand's main wallboard supplier Fletcher Building has also acknowledged extremelyhigh demand for the wall products.
Paul Bull, chief executive of one of New Zealand's largest house builders Signature Homes, said people over-ordering were making the supply of wall lining materials short.
"The biggest part of this issue is the toilet paper syndrome where many builders have panic bought and even placed the same order two to three times through different building merchants in the hope they receive it quicker," Bull said today.
"This obviously creates a false demand, so I agree with their stance of temporarily freezing orders to enable the genuine orders to be fulfilled correctly and as quickly as possible. We're being proactive with our orders via our building merchant, forecasting volumes by region and providing transparency so our demand can be met."
Fletcher Building's Winstone Wallboards has around a 94 per cent market share of New Zealand's wallboard.
Hamish McBeath of Fletcher Building. Photo / supplied
Hamish McBeath, Fletcher's building products chief executive, said the company was doing all it could to resolve matters.
"Strong demand exists across all building products in New Zealand. This, coupled with the current complexity and cost of importing materials from overseas, is resulting in even more demand for domestically made products such as gib plasterboard," McBeath said.
Winstone Wallboards was running its two manufacturing plants 24/7 dispatching enough plasterboard for 1000 new average-sized homes per week.
Construction of the new $400m Winstone Wallboards plasterboard plant at Tauriko. Photo / George Novak
"We are working closely with merchants to stabilise demand and ensure customers are getting the plasterboard products they need when they need it. There is a willingness on all sides to play a part in smoothing out the supply issues currently in play and we have agreed with merchants to move to an on allocation model for gib plasterboard from July. This approach will allow us to optimise our plants to deliver overall more consistent volume into the market," McBeath said.
Last May, Finance Minister Grant Robertson said the Commerce Commission will investigate the building materials sector after its supermarket investigation.
Robertson indicated a strong political appetite to examine high building material costs.
Robertson said we pay "far too much for building supplies".
Labour pledged in 2020 to probe the sector, saying it would direct the commission to start a market study into supermarkets, followed by a study into building supplies. Each study might take about a year to complete.
Trouble getting wallboards for sites. Photo / supplied
But Julien Leys, chief executive of the NZ Building Industry Federation, today said building materials were only one factor in high house prices.
McBeath said Fletcher was investing more than $400 million in a new state-of-the-art plasterboard plant in the Bay of Plenty.
The new plant will significantly increase production output and would have the capacity to meet the demand levels we are seeing today. The plant is on schedule to become operational from mid-June next year.
Stats NZ said consents for nearly 50,000 homes were issued in the latest year. That has broken all previous records and exceeded the early 1970s when entirely new suburbs like Glenfield were being created.
Fletcher, which employs around 14,000 people, released its half-year result today.
Shares are trading around $6.29, giving a market cap of $5b.