Skyrocketing Prices of Lumber in the U.S. and its Effect on the Aussie Market
In the construction and building industry, lumber is one irreplaceable commodity. We build properties both residential and commercial, using lumber or wood that has been processed. Lumber is very important, and fluctuations significantly influence the economy of so many countries in the world.
The latest news suggests that the price of lumber continues to skyrocket in the United States. So far, it has reached $US1,408 per thousand board feet. This is an increase of over 400% from 2020. That is huge. The increase is actually due to the decrease in production when the craziness that is COVID-19, most especially the earlier months last year. There was also a housing boom due to the newfound interest in doing DIY projects and bank low-interest rates.
For US investors, share prices of wood keep increasing. In Australia, the newest data suggests that the nation is currently going through a home-building boom. First-time homebuyers are currently taking such interest in building their very first residential property with the support coming from the government when the homeowner grant was created. While some experts are saying that the increase does not have a direct impact on the Australian market, there are some challenges that the suppliers and consumers of wood are facing.
Australia imports wood and other products from Europe, but now, these are being diverted into the United States because of the increase in prices over there. Because of this, there has been some effect seen such as some small price increases. There has been some shortage in terms of timber due to quite a few factors. One of the reasons is due to the Australian fires that occurred that decreased pine resources, plus there’s detached housing demand due to the Home Builder Scheme that was developed.
There’s also the matter with all the restrictions due to COVID-19 so imports were severely interrupted.The loss of resources and the sudden change in the way we all live due to the events last year affected the production of lumber. Fortunately, experts believe that these problems may sort themselves by the end of 2021. Simply put, while there may be some possibility, skyrocketing lumber prices might not be the case in Australia anytime soon, preparation is still key. We are heading to the beginning of the 3–4-year boom cycle in terms of building and construction. Building materials will most likely experience a huge increase in prices.