The number of new homes being completed in Auckland remains elevated with figures for February at a five year high.
Auckland Council issued 1164 Code Compliance Certificates (CCCs) for new dwellings, issued when a building is completed, in February. That's up 14% on February last year and was also the most for the month of February since 2018.
The high number of new homes completed in February also pushed the rolling monthly average to 1180 (per month), only slightly below the record high of 1202 set in June 2021.
The latest figures suggest that while building consent numbers, which are a forward looking indicator of construction work, point to a coming slowdown in residential construction activity, there is enough work already underway to keep builders busy for the time being at least.
There was also an improvement in the amount of time it takes for residential building projects to be completed, with 87% of the the dwellings completed in February receiving their CCC within two years of their building consents being issued, up from a low point of 66% in January.
That adds to growing evidence that recent materials supply constraints within the construction industry are starting to ease, reducing construction timeframes.
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32 Comments
All homes are dwellings, but not all dwellings are homes.
Very ture. I wouldn't call one of four townhouses in a 900 m2 section a home.
Rising interest rate, falling house prices, inflation touching new heights and now "High numbers of new homes are being completed in Auckland and they're taking less time to build as supply constraints ease" is a perfect recipe for disaster.
As long as those new build houses have already been sold of plan or if is being made by Rich Mum and Dad builders, having dep pockets to survive few years.
Million dollar loan on interest only as many builders opt - earlier at 3% was $30000 annualy or at 3.5% was $35000 which today at 8.5% is $85000 or at 8% is $800000. Earlier if not able to sell could rent it out and will be rent to mortage (on interest only loan) or pay slightly more from pockets but today, if unable to sell will have to go deep in pocket to survive.
They cannot start the next one untill they free capital from current build, so once they sit renting but unable to sell they are stuffed and have to cut staff...... If they sell too low they will also not have enough capital to start the next one... either way with IRD and tax etc, they need cashflow which will may not materialise.
Record numbers = record problem here.
Build it and they will come.
They came, they saw, they couldn't afford it so they left.
They came , they waited, Woods talked it up, they left, then they built, but there were no buyers, then they keep building, Woods boasts about the numbers, the market crashes, they keep building, the houses are guven to gangs, the slums go wild, Woods is praised fior the socual housing glut, economy burns, labour voted out, national pick up the pieces, ...
This is not good news.
Many will disagree. This is great news for people wanting to get into a new home. Prices in my area are getting slashed by hundreds of thousands to attract buyers - which they are eventually. Everything will find a buyer if it's priced to the market.
Yes its boom/bust economics, the bust is great for the buyers in the bust but sets up the next boom due to eventual lack of stock.
What we need is long term affordability. (easier to subdivide and build rules, 3 to a site helps).
A tax setup that encourages long term taxed investment (reinstate int deductions but keep brightline).
Yep exactly.
very predictable what will happen from here:
- Development slumps
- Many builders etc go out of business
- builders and tradies go overseas or retrain
- Sector capacity dwindles - and much smaller numbers of houses finished in 2024/2025 than in 2023
- OCR comes back to circa 3% by end of 2024, and with prices much lower, demand starts cranking up again - prices rise again (but only moderately this time) especially with new supply low (new supply won’t start cranking up until ‘25/‘26)
Rinse and repeat
This article literally talks about higher number of new homes being built, and it takes less time to build them. How do you still get "new supply low (new supply won't start cranking up until 25/26)"? No other narratives to talk about? You could talk about the increase of migrates in New Zealand to push your housing price going up soon narrative?
A lot of developers, part time developers and wannabe developers will be unhappy with David Parker extending Auckland Council’s deadline for decision making on plan change 78 by a year, to April 2025. I know that quite a few developers were holding out for April 2024 when most of the new rules would start to become useable. Now it’s April ‘25. A further headwind.
No quite what is happening on the ground. I am seeing house consents being issued under the future rules so long as the design doesn't approach too close any significant boundaries in the future rules. (Different story for apartment buildings though. For these it's a shambles!)
Whats your area? Rotovegas
Why do you say that?
Its great news.
The best thing is that even though house prices are falling to affordable levels (awesome for the mid-long term economy and for social cohesion) that consumer spend is continuing at reasonable levels. So as yet the negative wealth from a house price collapse isnt smashing our economy.
Whilst not solving inflation (yet) its awesome news.
The reason its great is :
Most people in NZ own homes to live in (not make money from) and want quality young professionals to be able to also own homes and kids to aspire to do so (so they work at school to become young professionals). Then we attract and retain young good teachers, police, engineers etc
- it will also result in us having a better productive innovative economy and reduce the current account deficit as people put money into quality businesses that can achieve export greatness. rather than real estate
- an excess of houses mean the govt can buy some for social housing (cut their taxpayer funded motel bills) and rent prices will drop as more rentals become available than renters :)
- those who got caught up in the NZ housing version of tulipmania will learn for the future the risk of leveraged investment in a single market. hopefully as a warning to others to really understand investment risk (and better manage emotions when decision making ) for significant investments.
- the attractiveness of Real Estate, development, trades will diminish for smart kids - in favor of more useful skills to build an export led innovative economy. Which has to happen now....
Whats not to like about it?
more useful skills to build an export led innovative economy
Leads a STEM grad overseas where the top paying jobs are.... I moved to London got paid 4 times NZD overnight.
We do not have capital markets and venture capital here for startups, hence most go over to the US... we have had this debate over and over. As a startup you want investors and contacts to grow your business not just money, that ecosystems happens in the US, not here.
NZ education system is not optimised to produce the STEM grads that you need for a highly innovative economy. We produce GOOD stem grads but not enough, in NZ the easy money is seen in the Law / Commerce dgreees.
Many NZ schools are eliminating the streamed classrooms that lead to more STEM grads, thanks Labour, now everyone is a winner and everyone is a loser.... grow up some are more talented then others.... like some can run faster then others or swim faster.....
CFO asks CEO: “What happens if we invest in developing our people and then they leave us?”
CEO: “ What happens if we don’t, and they stay?”
Xero, Author IT, RocketLab, Vend, Fraedom, Halter, F+P Healthcare -> off the top of my head are some of many businesses that kicked off here and did/do very well globally.
NZ needs to be able to produce innovative high tech stuff. Building houses and training lawyers who help to sell houses and sort squables between races is not an economy. Long term nor is traditional farming. I suspect if we keep heading the way we are our current account deficit will simply widen indefinitely.
Likely kids will train here, do an OE and get wealthy and experience (very very beneficial to us if they come back) and reasonable % of those will return to raise their kids - and a goo number of those\ will start a business here. Some of those businesses will kick ass globally.. so... the more kiwi kids trained and motivated and wealthy - who return from their OE to build export companies that change the world -> the more our startups will succeed and money will flow here into the next round of start ups .. and so on.
We can keep doing what we are.. lol.
We don't retain ownership of our businesses though, they either move offshore or they get sold into foreign ownership.
Huh? Did you read the bit about retailers saying they are phucked!?
I am thinking the quoted stats are in conflict with the opening statement. Increased CCC's and shorter build times would indicate more available resource (labour as well as materials). This along with lower building consent numbers would suggest to me the slowdown is already underway.
Greg any REINZ HPI news - I'm missing my next fix!
Emailed them inquiring about release timings last week - supposedly they intend to release the HPI tomorrow (Tuesday, the 18th).
And for future reference, apparently they aim to publish some time between the 10th / 12th working day of each month - given the holidays around Easter, it's been a bit later than usual.
A bit off topic, but worth raising awareness about - last night the Sunday current affairs show had a segment about workers getting silicosis (long term lung disease) from the silica dust created when shaping engineered stone bench tops. Israel and Australia were the main focus of the story but NZ was discussed at the end of the segment, well worth watching especially for those involved in working with the product.
Interesting to see the number of new dwellings built in Auckland. Auckland always sets the goals proportionatly for the rest of the country. Down here in little old Tasman our builders are still busy but there are signs! Interestingly the rate of new dwellings per head of population looks to have past the Auckland rate. No chance of overtaking the big smoke in total numbers but there will always be enough crumbs for us to have a feast.
An interesting OECD chart in this article which shows that NZs homelessness is well below the average and beats Australia by some margin.
https://independentaustralia.net/politics/politics-display/urgent-need-…
I could imagine the govt to ease on investor deposits for a 'quick fix' when the bail out starts
And next year? And the year after?
Many new builds are failing to sell now and many who bought off the plans with tiny deposits are walking away from their deposits. Meanwhile a consent lasts for 5 years and can be easily renewed.
Consents are not the "forward" indicator they once were.
Exactly.
I have been a broken record on this for the last couple of years. My points never seem to get anywhere, especially apparently with the editors - who do seem to think that consents all still the forward indicator that they have been in the past. Any shift in their commentary has been minimal.
Thank you 🙂
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