The completion of residential development projects in Australia might get delayed by up to six months as cargo for building materials majorly aluminium frames held up in China due to the Coronavirus epidemic.
Mark Bainey, the CEO, Capio Property Group, said: “My company's projects were unaffected by the building supply delays, other developers — particularly the bigger ones — were likely to suffer delays in completing their projects.”
He also added, "If there's a delay in obtaining the materials from China, for the builders to source that somewhere else will push back the completion dates.”
“We may see a delay in building completions for up to six months, which will also postpone bank settlement. This is going to cost developers more money and profitability."
Brian Seidler, Executive Director, Master Builders Association for NSW, said: "Some of our members are telling their clients that the projects could be delayed because of unavoidable shipment issues from China. They are asking clients for extensions to complete the project.”
Sydney-based developer Chris Abouhamad, director of Eastern Pacific, said: “Projects were not affected yet but delays were inevitable.”
"There definitely will be delays in the future, but it is an unprecedented situation," he said.
All this will impact in future ordering for aluminium for glazing, aluminium frames and lifts.
The aluminium products can be re-specified to be 100% locally sourced, though the local supply can erupt with challenges if it could not cope up with the demand. The promoters need to explore other options, as it is a short term solution, depending on the expanse of the virus.
Chris added: "The extent of the impact is unknown for now. It’s unpredictable at this point."
Iwan Sunito, chairman and group CEO of Crown Group, said: "The prices of many of the materials we use will probably go up because of supply and demand.”
"There are a lot of products that are going to be affected by the shipment delays. The biggest issue is going to be windows – all glass and all aluminium windows come from China.”
"It’s not just Chinese supply that is affected — it will be Indonesia, Thailand and other parts of Asia too. The alternatives are to go to the US or Europe, which again, will be more expensive."