Auckland's residential construction industry maintained its momentum at the end of last year, with the number of new homes completed up by a third compared to pre-Covid levels in 2019.
Auckland Council issued 1226 Code Compliance Certificates (CCCs) for new dwellings in December, up 5% compared to December 2021.
CCCs are issued when a building is completed and ready for occupation, so are the most reliable indicator of new housing supply.
The 1226 CCCs issued for new dwellings in December was the highest for the month of December since Auckland Council began collating the data in 2013.
That followed a very strong November when 1481 CCCs were issued for new dwellings in Auckland, the third highest number for any month of the year since 2013.
That took the total number of new homes completed in Auckland last year to 13,865, up 2.9% compared to 2021 and up a whopping 33% compared to pre-Covid levels in 2019.
So although building consent numbers have taken a slight dip recently, indicating the number of starts on new homes is likely to start slowing, the Auckland residential construction industry appears to fully occupied with existing work in hand for the moment.
The chart below shows the number of new dwellings completed in Auckland each month since January 2019.
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25 Comments
Most importantly what will the figures show this time next year?
I get the feeling that I shouldn't hold my breath while waiting for the construction slowdown to arrive. Maybe it will be slower in 2026?
Nah, it’s coming big time. Remember that most of the houses completed in late 2022 were started in late 2021 or early 2022.
Slow down is happening. Mate works at a mill making building lumber. After a year of failing to keep up with orders they have product stacking up.
Couple of clients of mine (probably soon to be ex-clients) sell equipment for residential construction, and inquiries to builders, painters etc are all falling off a cliff. Might be some pickup from the flooding but definitely harder times.
They have to complete the projects that they started several years ago......
Only if you get paid.....
Lots of new homes, very few buyers. How long can that last...
Yes - and the large number of building consents that have been issued suggests lots of supply. and we shouldn't expect construction to stop because prices fall (in auckland anyway). The reality is that the developer or home buyer is just considering whether the cost of building is less than the value of the house. The reality is that if house prices drop then the land value drops - but building is better than selling the land. I think supply will last a while longer than demand.
Some v big players have slashed h2 starts Everyone in business knows this is occurring
Oh do tell who please....
The feasibility studies at present are struggling to stack with high financing costs and higher material costs. Something has to give...
Critically it’s not just financing for developers/builders, it’s also finance for potential buyers.
This is the crux. Developments take years to get ready and execute. In a rising market you are a hero. On a falling market, with rising costs, a empty labour market, and rising interest rates you can very easily face bankruptcy.
Decent cash reserves may save you..
Known names big enough to advertise on radio and mainstream media , They big will get through but no point building when u cannot sell what you are finishing
Exactly. As I have said before I know one moderately big Auckland player that’s in strife.
Yes some of the stronger developers / builders will survive, although they will cut back massively on contractors over the next couple of years as they pull back on development.
...and wash up on the shore of Perth.
Sales are through the floor and consents in decline. Enjoy the homes Auckland they are all you will get for a while.
This website should be providing articles on what is happening right now and moving forward, rather than just relying on a few commenters to say this.
There are a lot of zero value-add "articles".
The local branch of *insert large nationwide house building company* usually sells 5 houses a week.
Haven't sold a house for 3 months.
The firm will go on as they don't have that high overheads, but their subbies will need to find other work - on the flipside there's several large retirement villages that've been on hold for a couple of years that are starting ground works.
It's really simple.
It is a matter which makes the builder the most in good times and the least loss in bad times.
Many cannot stop even if they wanted to.
If they have funded consents, then in the short term, the funding is the cash flow, even if they don't know if a market still exists when they are finished.
The problem is, that due to Govt. Policy, the supply and demand cycles are now running countercyclical.
Causing the classic boom and bust.
No one banks it big in the boom times except the land speculator/developer. Trades owners all struggle to hold staff and get shafted on wage, material and subbies price increases. They cannot pass these increases along due to fixed fee nature of tendering.
They all do better in low inflation environments.
Yes we are on the bust side.
Yes we are on the bust side.
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