A Kiwi building company says the cost of materials is so out of control they are seeing a year's worth of price increase in a single month.
It comes as huge demand worldwide has pushed the price of building materials up significantly in the past year. And it doesn't look like it's stopping anytime soon.
Bright Build business director Jen Taylor told The AM Show on Wednesday the COVID-19 pandemic has sent prices skyrocketing.
"Since the first round of COVID early last year we've noticed that what would typically be a year's worth of price increases may even happen in a month.
"We've seen an absolutely huge escalation as it's been the combination of a perfect storm. During lockdown there were materials that weren't being produced and China went offline and then once people got COVIDunder control...there was massive demand right across the world."
Taylor said timber alone has increased 20 percent in September, and it's not the first increase this year.
"Suddenly there was great demand and as a result obviously the costs started to increase. We have seen that across almost every line that we use. Some of them are really extensive.
"We've even got price increases that have just come through on the 1st of September for timber products that are 20 percent. Steel has gone up over 30 percent, they really are very, very significant costs."
She said the increases are making it difficult for building companies to give accurate quotes because prices can jump so quickly.
"I think fixed pricing, which is generally what most people would prefer and obviously banks and lenders, is going to become a thing of the past.
"The amount of administration that goes on behind the scenes to try to isolate what these price increases will be is huge, so I think what we will see is more transparent open book costing."
She said her lawyer has told her not to do fixed price quotes at the moment because the risk is too high.
The building industry has been feeling the pinch from increased prices for several months with many suggesting it could make New Zealand's housing crisis even worse.
A survey by the Registered Master Builders in August found 95 percent of companies were experiencing issues with delays, increased costs, customer complaints and product substitutions due to a lack of materials.
