Like most industries, construction has experienced supply chain issues in the wake of the pandemic and many projects have been delayed as a result of difficulties ordering materials. But the steep rise in costs is a massive concern for builders.

Over the past 12 months building product prices rose by 12.0 per cent, prices rose by 3.8 per cent during the December 2021 quarter alone, according to ABS statistics.

Some products are going through severe price spikes, such as reinforcing steel costs which are up 43.1 per cent over the year to December 2021 and structural timber prices, which are up by 39.7 per cent over the same period.

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Co-owner of Hotondo homes Wagga Craig Keogh said this is the most difficult period of his construction career.

"We've had massive delays across the board with different materials, but the prices of building materials have just gone through the roof, it's ridiculous," he said.

He said price fluctuation makes it increasingly difficult to price jobs, and importantly, to make any money.

"We're not talking ten per cent increases, or CPI, we're talking massive increases," he said.

"We do a fixed price contract and what we're finding once we go through the planning process and come out of council and are ready to build, by the time I'm buying materials, we're buying them for a lot more than we quoted."

Brian Seidler, Executive Director of Master Builders Association NSW, said that the number one question his organisation receives from builders is how to get out of a fixed contract.

"It's so significant ... unfortunately if you've got a lump sum [price] you have to honour the contract, some are saying 'I don't want to go ahead, I'm going to be working for nothing'," he said.

Mr Keogh builds around 40-45 homes a year and he said he is not making "anywhere near as much on a house" as he used to.

"The biggest challenge for us is holding the price from contract-sign to house completion," he said.

And price rises look set to continue as Australia boycotts Russian goods and flooding affects local materials.

"As time goes on [building a house] will get dearer and dearer ... this is the hardest time of my career," he said.

Mr Seidler said that as the high prices and scarcity of materials puts pressure on builders, ultimately house prices, and the price of building a new home, will go up for the consumer.

"If you're considering building you'll have to consider that it will cost more," he said.

"Someone has to pay for this, you can't ask a business to absorb it, in the end it's you and me."

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