The wait time for a new home in southern Western Australia has ballooned to more than a year as supply chain issues, material costs and increased demand cripples the industry.

Since the beginning of the pandemic, builders have reported increased stress and cost pressures with several WA companies collapsing.

Perth's Pindan Construction went into external administration in May 2021, and Albany-based Schlager Homes entered liquidation the following month.

More than a year later, the pressure is still being felt particularly in regional WA.

Operations manager of Albany-based firm Ryde Building Company Iian Woods said project completion times have slowed from 24 weeks in a normal year to 60 weeks in 2022.

"Certainly we're noticing it this year … as we complete jobs our margins are well below what we would have preferred," he said.

"We have had to make some changes to help with the workload and make sure things go a bit easier, but it's been really difficult managing trades and supply chain that's for sure."

Grants 'overheated the market completely'

In 2020, the state and federal governments began offering stimulus grants to new home buyers designed to keep the construction industry afloat during the pandemic, with eligible applicants being offered up to $45,000 to build.

Mr Woods said the increased workloads greatly increased pressure on builders who were facing supply chain delays and rising material costs.

He said clients had been empathetic, understanding the issues were largely out of his control.

"Most of the clients are pretty good, but we have had some people who are unhappy and understandably.

"But this is not the builder's fault, this is a result of the government grants and people wanting to get their hands on $45,000.

"I understand why [the governments] did it, but they've overheated the market completely … perhaps they should have worked closer with the industry rather than just charge off and do what they did."

He said the problem was amplified for regional builders who had to also deal with inflated freight costs and wait times.

"On top of increased material costs, we've also got additional transport costs because freight companies, obviously the cost of fuel has gone up, they've got to cover their margins as well."

Regional builders face extra challenges

According to Master Builders Association WA (MBAWA) the additional stress is being felt across the state.

"Builders are continuing to experience trades and skill shortages, along with significant price escalations still being felt as a continued result of the COVID-19 pandemic," a MBAWA spokesperson said.

"These price escalations with trade labour rates and building materials, along with the delays on materials have put more pressure on builders with costs and cashflow … in many circumstances, they cannot be passed on, and for the housing sector these progress payments are vital for sustaining a positive cashflow."

The association agreed that rural builders are facing additional pressure.

"In regional WA, significant challenges remain with a severe lack of diverse and affordable housing … compounding the challenges around the lack of labour and the skills shortage.

"Equally, the cost of transportation/haulage, from fuel and other associated costs has seen a drastic uptake in regional indexing for building costs."