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Good news for Auckland home seekers in latest building consent figures

Property
Good news for Auckland home seekers in latest building consent figures

The latest building consent figures contain some relief for Auckland home buyers with 1116 new dwelling consents issued in the city in July, up 58.8% compared to June and up 31% compared to July last year, according to Statistics NZ.

That breaks through the target of 1083 consents a month which Auckland Council has estimated are required just to keep pace with the region's rocketing population growth.

However, the challenge facing the Council and central government in the Auckland housing market will be to not just maintain the number of the number of new dwelling consents being issued at July's level but to increase it even further.

If new houses are becoming available in the region at around 1100 a month it should mean that the region's housing shortage isn't getting any worse, as long as net migration numbers don't increase further. However, it won't be enough to put a dent in the existing housing shortfall that's estimated to be between 35,000 and 45,000 homes.

July's dwelling consents were also up strongly in the Waikato, where 296 consents were issued compared to 207 in June and 211 in July last year, the Bay of Plenty where 181 consents were issued compared to 145 in June and 125 in July last year and Canterbury where 650 consents were issued compared to 544 in June and 609 in July last year.

The high number of new consents issued in Canterbury is likely to put further downward pressure on prices in the region where there are increasing signs that the supply of homes has caught with demand and is possibly starting to overtake it.

In Wellington only 106 new dwelling consents were issued in July, compared to 88 in June and 119 in July last year, which means Wellington had fewer consents issued than Auckland, Waikato, Bay of Plenty, Canterbury or Otago (see charts below for full regional dwelling consents trends).

Across the country 2824 new dwelling consents were issued in July compared to 2042 in June and 2282 in July last year.

The total value of new dwellings consented in July was $828 million with another $147 million of structural alteration work consented. taking the total value of new residential building work consented to $976 million for the month, compared to $780 million in July last year.

On the commercial building front, $455 million of non-residential building work was consented in July, almost unchanged from the $454 million consented in June but down from the $513 million consented in July last year.

July's figures included $122 million of office buildings, $108 million of retail premises and $67 million of educational buildings.

Building consents - residential

Select chart tabs

#issued Nationally
#issued in Northland
#issued in Auckland
#issued in the Waikato
#issued in the Bay of Plenty
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#issued in Hawkes Bay
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#issued in Wellington
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# Nelson
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# Westand
#issued in Canterbury
# Otago
# Southland

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24 Comments

Wow that is good news for those who are currently screwed by the current pricing of Auckland houses. Coupled with the need for some foreign buyers needing to sell up and get money home to shore up their losses in equities should also help things. NZ needs to get the Auckland tiger by the tail and get on top of it as the excessive mortgage interest currently being paid to banks is sucking money out of the economy and therefore making it difficult for small businesses to survive.

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Over-investment here we go.
As always by the time more and more investors want to join the party, the party is already finishing.

Good news for those who would wait till prices get lower to buy, because this news means prices will decrease further during the correction.

Bad news for the over-exposed financial system.

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Muntijaqi I think it is a bit early to take your stance. Immigration should make sure investors in new builds continue to make profits on their investments. Those profits might just be less than what they are currently making. It was not that long ago that builders in a provincial capital were making around $100k profit with each house they built. The GFC got rid of those kind of profits but generally it is always a profitable process.

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And if immigration doesn't increase because jobs are not being created?

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Good analytical article on immigration and jobs by Michael Reddell today
http://croakingcassandra.com/2015/08/31/what-occupations-did-our-perman…

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Agree, quality not quantity.

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Agree, quality not quantity.

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At some point there almost certainly will be an overcorrection. ie Too much supply. However unless another leaky home thing is percolating with these newly built homes, all of them will be sold. The oversupply will manifest itself in those suburbs where the landlords have not been keeping up with maintenance. Rental prices for those grotty houses will not grow. (But their rates bills probably will!) Less maintenance will be done. These houses will eventually become derelict.

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Yes, leaky home two syndrome is already starting to happen, but like the first leaky home crisis, the symptoms are being ignored and/or will take while to be noticed., so No won't stop the sale of the present lot of houses.

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Explain

leaky home MK II syndrome is already happening

We know you are in the property business which means you are an informed person with the capacity to explain what you are seeing and others are not

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In summary, leaky home 1 syndrome was about external moisture getting in behind cladding and into structure and not being able to readily get out.

Most new homes and renovations are now far more moisture tight to external moisture but it now means it is harder for all the internally generated moisture to escape and is building up above healthy levels in walls and especially roof voids were it rises and collects. This is slower than Leaky home 1 syndrome, but the end result will be the same.

The older style of housing was leaky in leaky out so moisture was less of a problem to the house, but of course made for a very cold, and costly to heat home.

By solving one problem, they are creating another. That's why insulating housing does not address the problem of excess moisture in housing; in fact it exacerbates it by holding the moisture within the living space and/or letting build up the house structure. I expect to see peoples health problems get worse in houses that only address insulation without ventilation.

Yes in theory you can manually vent it out, but with increased density, comes noise and security problems and also the fact people want to keep the heat in, so most people do not ventilate their homes enough.

Note what other jurisdictions are doing:

‘mechanical ventilation is now required in California to improve indoor air quality in all new residential construction, when alterations are made to a residence, and in residential additions of 1,000 sq ft or greater.’

https://resaveguide.lbl.gov/ca-ventilation-requirements

BUT you need to use the right type of mechanical system. There is a known problem if you don’t use fresh external air (and use a heat recovery system of course) and use roof void air to provide ‘fresh air’ ventilation into your home. For starters anything that involves poking holes through your fire retardant plasterboard is not a good idea. Secondly if you are a sleep at night and a fire starts at one end of the house, these systems have been known to push those fire gases through the venting system into every other room in the house. Note that there are two types of these systems: 1) taking warm air from say the lounge and venting it to other rooms, and 2) taking roof void air and returning it to the interior. Both can cause this problem.

You may recall the terrible story of a young mother and three children being gassed in Ashburton when a car was left running in the attached garage. This house was relatively new so was airtight enough that the gases could not vent out but could vent under the internal garage door into the house. I don’t know if it also had an internal circulating ventilation system as well, but my point is that the car engine provided this by default. This tragedy may not have happened had it been an older style home and the gases had more ‘leaky’ places to escape.

Add on top of this what it is costing the average punter to buy these time bombs. We are paying Rolls Royce prices and getting a Trabant.

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A well-insulated, airtight house with mechanical heat recovery ventilation to provide fresh warm air. Add in prevention of overheating and removal of thermal bridging and you have the passive house standard which is the gold standard for healthy living. If you are serious about your long-term health then you should only build this way. (Note: I am converted and building one now in Chch)

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air-tight is bad.

what are your gas exchange points?

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Thanks - very much appreciated

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You could just use wool insulation instead.

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Double glazing means that very little condensation from expired breath/gas heaters/drying clothes or cooking forms on the windows. Therefore there is no obvious humidity issue to solve by opening a window. It just build up and up....

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most window condensate isn't removed from the inside of the house.

the double glaze allows it to stay in air and furnishings including clothes and bedding, which is why dehumidification is a good idea if you have double glaze. Preferably through a quality heat inverter.

Opening the window is second option, but is important to keep up gas exchange anyway, so to keep your personal gas exchange systems working correctly (and I'm not talking about grandpa).

With the double glaze the internal airbourne moisture levels will be higher, so opening the window is _more_ important than single glaze, and double glaze tends to have tighter seals, and reduces air circulation from less asymmetric thermal gradient inside the room . So also important from a qi/feng shui point of view (too much fire and metal, so need to introduce earth (cool) and water (flow) to balance the air correctly.

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Leaky 1 wasn't just external moisture - that's just what the fixes were aimed at.

Much of the damage was simply due to trapping and people making sealed cavities. The cavity inside was cool so the materials would sweat into the cavity. The outside of materials would dry in heat and wind, then when the day got cool the surface would reabsorb external moisture especially from inside unaired houses and corners, and in high places where the warmer air held more moisture - if the air is warmer than the solid surfaces, the air touching the solid surface will cool, cooler air can carry less moisture so it condensates on to and thus in to dry objects. the air gains energy from the state change and has less moisture absorbing energy so moves upwards and is replaced with more damp air. This continues until the surface reaches equilibrium with atmosphere. However the moisture also transfers through the material, in a much slower, but similar manner.
On the inside cavity, the opposite happens. Cold moisture accumulates but has no external warming source, so the condensate builds up in the bottom of the cavity. The condensate has better internal thermal effusion so instead of a spot on the surface heating, the whole pool has to heat up. That acts as a thermal anchor/sink inside the cavity, keeping temperatures inside the cavity low. Any moisture building up and transferred to the air inside the cavity tries to reach equilibrium, but the pool at the bottom is even cooler so it traps any moisture it comes into contact with, reducing the condensate in the air, thus allowing more to come from the surface.
With no breeze to evaporate the pooling moisture, and no way to drain, the pools build up.

Add to that, capillary action means any tight joint without a groove (like on the old windows will act like a straw and suck water into the cavity because of meniscus action (h20 is drawn upwards to surfaces, from molecular "sticking" pressure) and pressure differentials. A wider gap with draining arrangement allows trapped moisture to move away. Problem is wider gaps lose heat, and done wrong allow penetration by rain and pool build up, and also the channels can be blocked by dust, building waste, or insects or spiders.

What does make the moisture problem worse is putting in damp/wet materials, or materials that aren't fully seasoned - when the moisture in the product condenses it does so in the cooler area. It's amazing how much moisture is trapped in such places.

Then when warmer weather does come, or the house is heated, the mould on the surfaces from previous atmospheric contact when it was installed will eventually start to grow. - and since it's perfectly safe (and an excellent mositure scavenger/trapper in it's little cells) it makes the problem worse.

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Still a long way to go......

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Good Lord!

31 months after Auckland Council published its Housing "Action" Plan and 22 months after the signing of the Special Housing Accord Auckland Council has finally hit its monthly target for the first time.

Of course the target was set three years ago and circumstances have changed a little since then.

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Well Rome was built in a day

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Ha ha.

850 years is closer to the truth (753BC - c100AD) - about the same time it will take for Auckland Council and the government to get everyone in Auckland who needs a decent roof over their heads under one.

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with the current dairy prices - work in rural NZ is going to decline - does anyone think this is going to lead to more population heading to cities (auckland) looking for work ?

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No Vik. Very few will head to Auckland. Things are not as good in Auckland as they are in the regions. While it's true there will be dairy job losses and personal difficulty as a result, most workers are far better off to stay away from Auckland.

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