Update on the residential framing market

Timber continues to be the structural material of choice for residential dwellings according to research commissioned by FWPA, however, there are opportunities (and threats) for substitute products such as Structural Insulated Panels (SIPs) and steel framing.

Australian Construction Insights (ACI) has produced a new report, Framing material use in residential construction, for FWPA. Building on its 2016 study, ACI analyses changes in the market share for timber frame construction during the intervening period. The ACI report also investigates factors influencing the decisions to use particular materials and assesses industry perceptions of innovation in the materials and systems being used for the structural, load-bearing elements of newly built homes.

The report drew on survey data from the Housing Industry Association, in which residential builders provided anecdotal insights into construction-framing market shares.

The report suggests about 73 per cent of detached homes built during the 2017–18 financial year are of timber frame construction. This was down from the 76 per cent suggested for the 2015 calendar year (as reported in the 2016 report). Market share for double brick (11 per cent) and SIP (2 per cent) remained the same.

The report also analysed additional data where it was available. This included the extensive Victorian Building Authority database, which covers all building permits issued in Victoria. The data for the 2017–18 period showed that of the 33,820 Class 1 building permits which specifically identified the framing material used, 32,320 were timber and 1,231 were steel. This represents a reduction of just over one per cent for timber framing when compared to the 2015 period.

FWPA’s Statistics and Economics Manager Jim Houghton commented that meeting demand for timber has become challenging and is aggravated by recent movement in international markets.

“With local production running at capacity, the swing volume has traditionally been serviced by imports which provide a significant source of supply,” said Mr Houghton.

“The difference in the past two years has been the higher activity levels in North America and Europe which have been associated with increasing prices. 

“The supply and demand dynamics in the market will see substitute products emerge if traditional products such as timber struggle to meet demand,” he said.

This could provide opportunity for SIPs. The ACI research indicated that an installed solution was something builders were looking for. This would involve greater modular construction with off-site manufacture of wall frame and roof trusses right through to on-site installation, saving time and money.

Among all the material types surveyed, timber was the leader in having had “a high degree of innovation” over the last five years, but if “high” and “moderately high” degrees of innovation were combined, SIPs came out on top and were considered to present the greatest opportunities for innovation, followed by timber and lightweight steel.

More information on SIPs can be found on the WoodSolutions website.

The Framing material use in residential construction report is available for download on the FWPA website.