Frozen orders from the country’s leading producer of plasterboard have left an opportunity for people to capitalise on selling personal stock
A shortage of GIB plasterboard has seen private sellers offering what’s left of their stock at premium prices.
A seller in Manukau is selling Fyreline GIB board one single sheet at a time, with $1 reserves. A single sheet they sold Monday went for $100, around triple the usual price.
Before the current shortage, a standard sheet of GIB plasterboard would go for just over $30 retail price at Bunnings Warehouse. Right now, another current Trade Me auction is offering the same product with more than a third of an increase in price.
The auction began with a reserve of $1, suggesting that plummeting supply has made tradies more likely to cough up the cash for plasterboard.
The decision to sell the plasterboard has polarised onlookers, with some saying it is wrong to take advantage of the difficulties hitting the construction sector and others saying it is within the bounds of the market.
“It doesn't take anyone too intelligent to take advantage of the industry in crisis,” said one commenter on the aforementioned auction. “There should be plenty of GIB to go around if the opportunists weren't taking advantage of the situation.”
The seller rejected the idea that they were capitalising on a bad situation, responding to accusations of greed by pointing out the $1 reserve and saying they “could not careless [sic] about the shortage it’s not my problem or fault”.
It’s a back and forth being played out in repeat across the country, as pent-up demand within the construction sector calls for more plasterboard than the country’s biggest producer can provide.
With almost 300 listings for plasterboard up on Trade Me, there are plenty of sellers deciding it’s worth letting someone else take it off their hands, potentially for no small amount of money.
Meanwhile, the two manufacturing sites for GIB are operating 24/7 and producing plasterboard at record levels.
David Thomas, general manager for Fletcher Building subsidiary and GIB-producer Winstone Wallboards, explained earlier this month that while the company was working flat-tack to put out plasterboard, unprecedented supply meant an enormous back-log of orders.
Daily orders as of March 2022 were more than double what they were in July 2021.
“Demand is simply outstripping production capacity,” Thomas said.
Demand comes from a busy construction sector. In the year ending September 2021, the number of new dwellings consented was 47,331, up a quarter on the year before, causing skyrocketing demand for building materials across the board.
Winstone Wallboards plans to meet this elevated demand by upping its own production capacity, with plans to break ground on a $400 million manufacturing site in the Bay of Plenty, to be operational by June of next year.
But with this new factory still just a twinkle in Fletcher Building’s eye, builders are having a tough time sourcing crucial materials they need for the job.
Dan Heyworth, co-founder of design and building firm Box, said shortages like this could be expected when so many Kiwi builds are reliant on a product from one single supplier.
“That’s going to be a problem when you are dealing with a supplier that owns over 90 percent of the market,” he said. “It’s a really good example of how fragile the GIB supply market is and how dangerous it is to have a complete lack of competition.”
He said the “unofficial rulebook” of New Zealand building was using plasterboard to brace houses - a situation that has created more unmet demand than might be seen in other countries.
“We have a mindset in New Zealand that we have to use plasterboard as a bracing solution, when that’s not the case, there are a number of other bracing solutions out there,” he said. “But if you do use it as a bracing solution, it is really hard to use anything other than GIB.”
He said complex standards in New Zealand made it difficult for others to enter the market and wrest near-total control from Fletcher Building's grasp.
"It's the creating of barriers to entry through complicated and technical standards specific to New Zealand, whether that's windows or plasterboard," he said. "It makes it difficult for other competitors to come in and sell product."
Fletcher Building controls at least 94 percent of the market for plasterboard, as Newsroom previously reported.
