The number of seasonally adjusted building consents for dwellings rose 8.8% in November from October, buoyed by consents for retirement village units, Statistics New Zealand said today. There were 1,268 consents for dwellings, figures show, up from 1,165 in October.
However, removing the volatile apartment category, which was dominated by consents for assisted living apartments associated with retirement villages, the number of consents for new dwellings fell 2.6% from October, Stats NZ said.
The trend for consents excluding apartments had fallen steadily, declining 22% since the recent peak in March 2010, Stats NZ said. The current level was 53% lower than the series peak in September 2003.
The value of residential building consents was NZ$514 million in November 2010, down 4.4% compared with November 2009, Stats NZ said. The value trend had been declining since April 2010, and had fallen 14% over this period.
Unadjusted figures show there were 1,470 dwelling consents in November, down 2% from 1,500 in November 2009.
There were a small number of earthquake related consents in Canterbury in November 2010, Stats NZ said. "The total value of these was NZ$2.3 million. Two of these were for new dwellings," Stats NZ said.
'Significant risk of housing shortage if issuance doesn't pick up'
ASB economist Chris Tennent-Brown said residential building consent issuance remained weak, with the November total only held up by a high number of apartment consents.
"The current level of consent issuance is broadly consistent with our weak residential construction forecasts for late 2010 and early 2011. However, if we do not see a pick-up in consent issuance over the coming year, there is a significant risk of a housing shortage in the years ahead," Tennent-Brown said.
"Over the coming years building consent data will be significantly affected by the Canterbury earthquake. Beyond Canterbury, our forecasts contain a weak lift for the construction sector. Weak population growth and a low level of activity in the housing market, means there is little in the way of a catalyst beyond the earthquake to stimulate a pick-up in residential construction activity in the near-term," he said.
"The RBNZ’s near-term outlook for the domestic economy is subdued, and in the December MPS the Bank expressed surprised with how little traction low interest rates were having on the economy, including the housing market. We now think that the RBNZ will wait until June before it hikes the OCR and we expect it will only hike at Monetary Policy Statements over 2011 (i.e. one hike every 3 months)," he said.
For all our building consent and real estate charts see here.
Here is the release from Stats NZ:
Mixed results for building consents
In November 2010, the value of consents issued for non-residential buildings was $479 million, the highest value since May 2009, Statistics New Zealand said today. The two main contributors to this value were education buildings, and factories and industrial buildings, bringing the non-residential buildings value up 23 percent compared with November 2009. In contrast, over the same period, the value of residential buildings decreased by 4.4 percent to $514 million.
The seasonally adjusted number of new housing units authorised, excluding apartments, fell 2.6 percent in November 2010, the fifth consecutive monthly fall. When the volatile apartment category is included, the number of new housing units authorised rose 8.8 percent, following a 1.8 percent fall in October 2010.
In November 2010, without adjusting for seasonal effects, consents were issued for:
- 1,470 new housing units, including apartments
- 1,244 new housing units, excluding apartments
- 226 new apartments (154 are assisted-living apartments associated with retirement villages).
In Canterbury, there were a small number of earthquake-related consents identified in November 2010.
The total value of these was $2.3 million. Two of these were for new dwellings.
Building consent values include goods and services tax (GST), which increased from 12.5 percent to 15 percent from 1 October 2010. It is not possible to separate the impact of this change on building consent statistics.
Data for building consents is obtained each month from all territorial authorities.
Here are ASB economist Chris Tennant-Brown's comments on the figures:
Residential Consent issuance
Residential consent issuance remains weak, with the November total only held up by a high number of apartment consents. The current level of consent issuance is broadly consistent with our weak residential construction forecasts for late 2010 and early 2011. However, if we do not see a pick-up in consent issuance over the coming year, there is a significant risk of a housing shortage in the years ahead.
Earthquake reconstruction in the Canterbury region is one positive for residential construction. Some clearing of the backlogs due to September’s disruptions may have been behind the October and November lift in Canterbury consent issuance. We expect that it will take many months to assess the damaged houses in Canterbury and it is likely that the actual consents to build replacement houses will flow through into consents issued over the coming year.
Non-residential consent issuance
Non-residential consent issuance was high in November, with the value of consents issued the highest since May 2009. The value of consents issued for the three months to November are now up 14.5% on the corresponding period a year earlier. The lift is encouraging, given the very low value of non-residential consents issued during most other months in 2010.
Implications
Over the coming years building consent data will be significantly affected by the Canterbury earthquake. Beyond Canterbury, our forecasts contain a weak lift for the construction sector. Weak population growth and a low level of activity in the housing market, means there is little in the way of a catalyst beyond the earthquake to stimulate a pick-up in residential construction activity in the near-term.
The RBNZ’s near-term outlook for the domestic economy is subdued, and in the December MPS the Bank expressed surprised with how little traction low interest rates were having on the economy, including the housing market. We now think that the RBNZ will wait until June before it hikes the OCR and we expect it will only hike at Monetary Policy Statements over 2011 (i.e. one hike every 3 months).
(Updates with ASB comment, links, release, chart)
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26 Comments
It would be interesting to see a demographic breakdown of the shareholders of NZX listed retirement village developer & operator , Ryman Healthcare .
I have a niggly naggly feeling that some BB's are happily profiting off their own generation ............. I certainly am , tee hee hee .......... oooooooh the loot , the loverly gubbily munny , hunny ............. aha de haaaaaaaaaaaa . That's why they call 'em " Golden Oldies " !
"House prices this year will plunge as much as 10pc to their lowest level since 2004 after suffering a far sharper decline than expected last month, economists have warned."
But down here in NZ we have the govt and RB busting a gut to protect the bubbles to save the banks and keeping homes seriously unaffordable is priority.....go figure.
"The property market could be set for early-year price falls due to a build up of unsold properties, with new figures by property research company SQM Research showing the number of listings swelled 44% over 2010."
Nothing to see here...move along....
Good to see you are still fighting in the trenches Marlarkey. Quite frankly it defies the laws of physics if there isn't some correction in Australia, as since 2007, when things cooled in NZ, Australia has continued to go on ahead full steam over past 3 years Think NZ probably got it right! Time will tell, but at present with the average wage at $69k a couple wanting to buy a reasonable entry level property in much of Aotearoa should have little difficulty, especially with interest rates being so good and even allowing for some increase- when I purchased a property about 25 years ago, the rates were, I recall, about 18%.
Now either you or alternatively /SK could be right, but have you considered neither of you could be on the money??- that things may not be so rosy but nor are they as bad as you seem to fear.
The annual $69k is average wage, so should not be compared to median house prices. Median pre tax income is about $27k and, of course 50% of us earn less than that.
In fact you would need to be in the upper quartile (top 25%) to be earning the average, a sorry story in itself. Further, where house prices are lower the median wages is as well. So yes, kiwi home prices are high/unaffordable IMHO.
Definitely not from Statistics NZ.
http://www.stats.govt.nz/browse_for_stats/work_income_and_spending/Inco…
I have always wondered what the split between primary homes and second (holiday) homes was.
Looking at the holiday areas there seemed to be a lot of building in the 2004-09 period that doesn't seem to be happening now.
Do these figures just reflect the base primary home building and drop in second homes. Northland (a holiday area) seems to have dropped from around 100/mth up to 2008 to 50/mth after 2008, while Wgtn has gone from 160 to 130.
Wolly: I understand you live in the wonderful South, however I am in Auckland. The Auckland market has three seperate types of properties for sale, they are what I call the good bread and butter type of property which is still in high demand (ie no issues with them) Then there are the Plaster homes and some are leaky, with the third type being those ones that have never had a code of compliance cerificate issued.
The later two are difficult to sell, but the good homes are still increasing in price and will continue to do so. In my book good properties still double in price every 10 years. Personally I don't see that changing anytime soon. The key word being GOOD!
Again, Gavin: What will those two types of non prime property sell for? At a discount, if at all, and that will drag down the price of untainted stock. It has too! Eventually the defective stuff will reach.....zero$, otherwise...and that's not going to happen ( is it?!). So the buyers will migrate to lesser quality as the prices fall, leaving ...less buyers for the uneffected stuff....it's a fall across the board..everywhere...coming up!
Gavin how are properties going to double in price over the next ten years as people's incomes are certainly not going to double over that time. As I see it they are already struggling in NZ with the basic costs of living which seem to be going up daily at present. Many are already not coping with the mortgages and rents they already have. As I see it property over the next few years is just going to gradually drop in value and get back to levels where the average person can afford to buy a home and look after their families again without the insane levels of debt they were taking on over the mid 2000's.
Wolly: No I will not bet the house on it, but I will continue to buy sensibly. I encourage my children to always have 50% equity in a property before purchasing another. A property that was purchased for $26,000 30 years ago and now returns $550.00 per week rent looks good for future income! and there are of course others. (I personally don't intend to retire)
Nicholas and Ex Agent, I thankfully gave up listening to the dooms day brigade years ago! The problem is most parents don't know how to invest and so how can they possibly teach their children. We live in a society that wants everything now, yet wealth is built slowly and carefully and YES it does take sacrifice. (not a popular word today)
Oky Doky, Gavin. Let's look at your 10 year doubling plan ~ today. That property, theoretically or actually, bought 5 years ago on 12/1/06. How's it doing? Has it put on it's expected 50% ( or whatever the NAC would need it to be). If not; it's got quite a bit of appreciation to do over the last 5 years of it's run, don't you think....
Scarfie: Get a life, its not about how much you earn rather than what you do with what you earn.
I know labourers, trades people, nurses, teachers and police that all own properties. Some may have taken longer to start, but they are now on the right track.
Sure blow everything you earn and you will get no where fast! and be careful with Debt! (A problem for many that don't even own property) It does take discipline Scarfi and TIME!
Pay yourself 10-20% of what you earn first for investment from a young age, be wise and in your latter years you will reap the benefit. (Thoses latter years will arrive quicker than you think)
Nicholas: No you just need to go back 10 years from today. Pick a street and see what price they sold for 10 years ago and I'm sure you would be very happy to pay that today. I sold a guy a house 40 years ago with a money back guarentee! Be great if he took me up on it today. Sold it for $42,000 and it would be worth aprox 1.3M today!
What most don't understand is that the property market can move very substantially in just one day, but to pick that day!
Certainly in Auckland there are not many streets that don't double every 10 years but then again I am sure someone can show me an exception, but there will be a reason for it.
Mate in the late 1980s there were Japanese people saying the exact same thing as you are saying now. Sure you are going to say "that's different!!!" ..... only it isn't really. Nobody should be silly enough to believe it can't and won't happen here too!
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