Photo of a clearing in the woods surrounded by trees with the Canadian Rockies in the background.

After experiencing a tumultuous past two years, timber prices are expected to rise once more.

Data updated on April 20 by the International Monetary Fund (IMF) and our forecasts predict soft sawnwood price of US Douglas fir to increase by 15 per cent over the next 24 months.

The Douglas fir price serves as a useful reference for the Australian timber industry which is becoming increasingly import-driven. The per-unit-volume price of imports is expected to experience yet another rise as the construction industry deals with a combination of see-sawing demand, material shortages, and wild price swings.

Soft sawnwood prices

In the 30 years leading into February 2021, the export price of Douglas fir soft sawnwood steadily rose from around $US200 a cubic metre to $US334, experiencing a peak price of $US372 in October 2006.

However, the price since February 2021 has been far more turbulent. Between February and June 2021, prices increased from $US334 a cu m to $US436, before plummeting to the commodity’s lowest value of $US294 just three months later — a price not seen since March 2017.

The single largest increase in value occurred another five months later, when prices rose from $US338 a cu m in February 2022 to $US466 the following month, a 38 per cent increase.

Since the peaks of 2021 and early 2022, the price of soft sawnwood dramatically dropped from August 2022 to January 2023, where prices remained relatively stable at $307 for the first three months of 2023.

Soft Sawnwood Price with Tentacle Prediction Soft Sawnwood, average export price of Douglas Fir, U.S. Price, US$ per cubic meter. Source: US International Trade Commission.

It’s our globalised world – and it’s causing volatility

The remarkably volatile soft sawnwood figures experienced over the past two years is a reflection of our increasingly globalised world — the interconnectedness between industries, markets, commodities and nations; the ways in which they influence each other and an industry positioned at the mercy of events outside its control.

Recent price falls are primarily due to an oversupply and slowing down of demand.

According to HIA chief economist Tim Reardon “What happened is that builders have over-ordered in timber. You ran short of it, your natural response is to over-order. Drive around most residential suburbs right now and you see a concrete slab with a pile of timber sitting on top of it.”

We expect the price to steadily increase to $355 a cu m in January 2025 and beyond – perhaps a hint that prices might finally stabilise, providing much needed respite from the erratic past couple of years.

These cooler, more stable predicted prices will be welcomed in Australia.

The Australian Timber Industry

The Australian timber industry has been receiving a bruising since late 2019.

The bushfires in the summer of 2019-2020 burnt 8.43 million hectares of native forests and 130,000 hectares of plantations in eastern and southern Australia.

Coupled with the introduction of a native forest harvesting ban in Western Australia by 2024, and a phasing-out in Victoria between 2024 and 2030 (both announced in 2021), a shortage in domestic timber stock has, and will continue to occur.

Just six months later – and three months into the COVID-19 pandemic in Australia – the federal government announced $688 million Homebuilder scheme, providing eligible owner-occupiers with a grant of up to $25,000 towards building a new home or renovating an existing one. This led to an increase in building demand.

The shortage of domestic timber stock and increased building demand led to the increase in timber imports. In 2020, Australia imported $US249 m in sawnwood, with the top three exporters to Australia New Zealand (28.9 per cent), Germany (10.4 per cent) and Estonia (9.27 per cent).

In 2021, however, Australia’s importation of sawnwood increased by 147 per cent to $US617 m (making it the 19th  largest global importer), with Germany (24.1 per cent), New Zealand (20.5 per cent) and Sweden (7.95 per cent) taking out the top spots.

The increased number of imports also coincided with Russia’s war on Ukraine.

In 2021, Russia was the world’s second largest exporter of sawnwood ($US6.1 billion), holding 10.8 per cent of global market share.

As global sanctions were imposed on Russia and importers looked to source timber elsewhere, shipping and transport costs rose, thanks to growing demand and rising container and fuel costs.

The combination of all these factors caused the Australian timber industry to suffer.

Impact on the housing and construction markets

The implications of these pressures on the building, construction and housing markets, can be understood by looking at datasets provided by the Australian Bureau of Statistics (ABS) and the Housing Industry Association (HIA).

Our data and that sourced from the ABS via Trading Economics reveals that the value of Australian home loans almost doubled over a year since the June 2020 Homebuilding scheme – peaking mid-2021.

Over the same period, the HIA shows private new home sales data suddenly spiked, peaking at 13,527 sales in December 2020 – a level not seen since November 2001.

With an increase in new home sales came an influx of private house approvals. Between July and December 2020, ABS data showed approvals increased from about 4 per cent to just over 15 per cent on a month-on-month basis.

From submission to approval, housing approvals can take anywhere from five to nine months. Once these time delays were factored in, construction outputs experienced an increase of 1.6 per cent quarter-on-quarter in Q1 2021, and 3.1 per cent in Q2 2021.

Currently, the total value of Australian home loans has returned to pre-pandemic levels, leading to a drop in new private home sales, reaching record low levels in November 2022.

This led to private house approvals trending downwards from February 2022 to January 2023, before increasing by 11.3 per cent the following month.

Australian construction output see-sawed, correlating most closely to timber prices – in part likely due to the irregular rate of importation of soft sawnwood.


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The recent respite offered to the building and construction industry, and by extension the housing market, by falling soft sawnwood prices is not expected to stick around for too much longer.

While Australian interest rates rose 10 months in a row to March 2023, to 3.60 per cent — a typical indicator for housing price growth — the IMF’s new release of data on April 20 has led to updated predictions of Douglas fir soft sawnwood prices on Tentacle CM&I, suggesting values are set to rise from March 2023 ($US307a cu m) to $US353 in January 2024, when they are expected to plateau until February 2025, providing much needed stability in an increasingly volatile market.

This article is a product of a recent study on commodities price forecasting.

Riley Faulkner, Tentacle

Architectural Designer

Tentacle CM&I

Riley Faulkner is architectural designer with Tentacle CM&I. More by Riley Faulkner, Tentacle

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  1. It is indeed good news that there are native harvesting bans in WA & Vic, given the enormous damage that those practices are having on native wildlife habitats – particularly old growth logs.
    It’s about time that Australia got serious about increasing plantations, as a primary path to lower embodied emissions buildings is through timber including mass timber construction.