THE Regional Forest Agreement introduced two years ago was expected by many to lead to ongoing timber price increases and a consequent rise in the cost of housing.
But these fears have proved unfounded, despite the WA Government’s draft forest management plan, which has placed restrictions on the supply of timber. Prices have not been forced out of control, in part because timber operators believe there has been a demand shift to substitute products, as jarrah becomes increasingly difficult to obtain.
Timber merchant and retailer Colli & Sons general manager Cesare Colli said any significant increase in timber prices would have had a beneficial effect on his family business.
“In effect it [the price] hasn’t moved; it has done no more than keep up with inflation,” he said.
Retail prices in stores such as Colli & Sons, Mitre 10 and Bunnings have made marginal increases of around 3 per cent a year, Mr Colli said.
“Certainly not huge price increases,” he said.
Wesfarmers timber merchant subsidiary Sotico recently sent letters to its clients advising them of a small increase in prices from next month.
One possible explanation for the relatively steady price increases in local timber products is that a shift has occurred in buying patterns, a point explained by Housing Industry Association chief executive John Dastlik
“What the industry has been doing for a number of years now is trying to utilise plantation timber. We could see that was the future,” Mr Dastlik said.
The flexibility to adjust so as to maintain margins has been behind the operations of builders such as BGC.
BGC Housing general manager Anthony Kinder said the price of timber was fairly competitive at the moment.
“Timber has a lot of volatility in the price and at the moment we are finding it fairly competitive, but it’s also very volatile,” he said. “You will find it can change from month to month by as much as 10 per cent.”
However, A& A Kitchens managing director John Dykstra said even getting select grade green jarrah was an “almost impossible task”, resulting in shifting demand, which ultimately flowed on to higher prices.
