Building consents rise strongly in November, hitting a 13-year high nationally, a 15-year high in Auckland. Apartments and townhouses drive the spike

The level of building consents issued took a jump in November, rising to a 13-year high.

All up, 3,262 new consents for residential units were issued in November nationally, a level we haven't seen since June 2004.

That was largely driven by apartments, especially in Auckland.

The number of consents issued for new houses was 1,870, which is about the average for the past nine months, so is unremarkable.

However, there were 543 consents for apartments in the month nationally, and another 577 for townhouses, flats and units. In addition, a further 272 were issued for retirement units.

In Auckland, where there is a widely recognised housing shortage, the increase in building consents was even higher.

They reached their second-highest level on record at 1,450 units, beaten only by October 2002 when nearly 2,000 new homes were consented due to a much larger spike in apartments.

Of the total in Auckland, 530 were for houses, 436 for apartments and 311 for townhouses, flats, etc.

Apartment consents tend to be spikey, but over the past twelve months consents for them in Auckland reached 2,351, the highest annual rate since October 2005. (The highest was 4,928 in 2004.) However, the 2017 level is qualitatively different to those earlier periods when there was a frenzy of building shoe-box apartments. This sector has moved on to higher spec units in 2017, more suited to downsizing baby boomers. Apartments for first-home buyers are also being built, and the growth of this sector is increasing. The average floor area of Auckland apartments rose to 130 m2 in October 2016, but with the first-home buyer market rising (which probably includes paroperty investors as well), that average dropped below 100 m2 for the first time in November since mid 2012.

And the level of townhouse building in Auckland is the highest since August 1999. On an annual basis it is a 17 year high.

Auckland townhouses tend to be about 120 m2 and are being built at about $2100/m2. (That compares with an average Auckland house consent at 230 m2 and an average consent value of $2,030/m2.) However, there could be buyer resistance on the horizon as cost/m2 are growing at about +12% pa/m2. (Housing consent values are growing at +7% pa/m2.) These types of market forces (capacity constraints mainly) will have an impact on th eimpending KiwiBuild program, and the demands of KiwiBuild will likely have a large cost impact on those outside that system as well.

ASB says capacity constraints, credit conditions and a slowing housing market have constrained house building demand.  Looking ahead over the next few months, additional uncertainty, as developers await further details of the proposed KiwiBuild plan, may weigh on construction demand but this should be a short-lived dip.  They expect further growth in Wellington housing construction over the coming year, and for Auckland activity to hold up at very high levels.

Consent levels in centres other than Auckland are unrekmarkable in November, although things are strong in Bay of Plenty and in Gisborne. There was a surprising dip in Tasman, however.

Building consents - type

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Building consents - residential

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David something else you should mention is that a significant proportion (how significant?) of the apartment consents will be for Housing NZ. Would be nice to get data on that

Yes, great work Labour - NZ first - Greens!!!!

We asked Stats NZ for this data and have now agreed the details to be supplied. Will get it sometime next week.

David, due the admittedly spikey nature of consents - which has always been the situation, holidays, working day counts, short months etc - would not a moving annual total series superimposed show trends in a more appropriate manner at a glance ?

Fantastic news. Don't care who is building them but simply that more accommodation will be available.

More intensified housing is excellent news for Auckland, rather than grotesquely large and flashy McMansions.


i was told the sky was going to fall under Labour.. hmmmm

Labour will have had little impact since the election in consent volumes as they simply haven't had the time to do anything other than move into the beehive and have a quick look around. Shane Jones did manage to get married as well.

Consent in AKL was anywhere from 6-10 weeks last time I looked, with the first correspondence usually being at the end of the statutory processing deadline extending the processing time frame, but nothing else.

Consents in Auckland will take anywhere from 3-6 months ( if your work is concise and you are Lucky) .... these projects would have been in the pipeline for months!
however, it is good news ... lets see what they've produced in the following months

fair enough..

It takes 6 to 12 months to design, engineer, survey, cost and obtain a building consent for houses and significantly longer fit apartments. This spike has nothing to do with the current government but is the result of the previous government

Housing NZ have massively ramped up development - maybe a reporter from could contact Housing NZ and ask for a schedule of the hundreds of apartments and terraces they have recently consented all across Auckland

Yes. As I said at the top would be good to know their data in relation to the whole
I suspect it will show private sector isn't building anywhere near enough

Apartments and townhouses....ideal for bring up kids in.

And why not?

Teacher: Can you please come in to the school we need to talk about little Billys grades.
Mother: What seems to be the issue?
Teacher: He's acting up, his grades are going through the floor and he's distracting the other children
Mother: Sorry, but we live in an appartment
Teacher: Oh..... I'm terribly sorry, that explains it, why didnt you say?

Virtually the whole population of Singapore live in apartments yet that doesn't seem to affect their world class ranking in childhood education achievements.


"Rapid growth in apartment developments in recent decades has led to a rise in noise-related complaints and disputes across urban Australia."


Kids?! Who can afford the luxury of children after shelling out most of what's been saved for 10 years to stump up the deposit on a home, followed by the next 30 years servicing the debt assumed to get the keys to the front door?

(Repost: "That will be covered by wage rises over the coming years that will 'deflate' the debt" - Good luck with that!)

The housing market is a chain or a pyramid. Apartments are usually inhabited by childless people. Often but not always younger, but who want proximity to the hubbub. What on earth is wrong with that? If that demographic can buy apartments instead of houses, that frees up the houses for families with kids, and reduces the demand and prices.

"Apartments and townhouses....ideal for bring up kids in"...As long as you keep up-to-date with all vaccinations, you will be just fine.!

The latest Scientific Research suggests that those that are often commuting via Public Transport increases your natural immunity in the body by being more exposed to the common viruses. So after the first few months/years of living in apartments and commuting, these people will have a more robust immune system. One would hope anyway.

Similar research indicates the importance of pets to reducing auto-immune diseases such as asthma. So the apartments need to allow pets.

My townhouse is large enough for both my kids. Its next to a park. It's insulated and double glazed, with a heatpump.

Now explain to me why it's not ideal?

Being hermetically sealed for one

I grew up in an apartment my whole childhood, it was great

Auckland townhouses tend to be about 120 m2 and are being built at about $2100/m2.

So $252k to build an average townhouse house? Sounds cheap...

It sounds about right.
About the same cost as Australia. The US is a bit cheaper.

It's the cost of land under those houses that is the issue.

It'll be land that will cost you most

This isn't a go at you Narrabeen Boy, just a question I'm throwing out there, as I genuinely don't understand it.

"It's the land" - why is it the land?

Population density of Auckland is actually pretty low comparatively to other cities - lower than Dublin, Amsterdam let alone London, New York and at the massive end of the scale Delhi, Beijing

Population density of New Zealand is tiny - 15 people per square km. it's 395 people per sq km in the UK - similar sized country, Italy another similar sized country 201 per square kilometre. Both of which are restrained by either land or sea borders in terms of size.

My view is that the narrative exists, mostly because the houses are built so shittily, and everyone's bought into it unquestioningly.

It is the land, because our dip wit council has spent the last decade shutting off land supply to Auckland City. Auckland Council decided the places most in need of massive new expansion were Orewa, Warkworth, Beachlands, Pukekohe, Huapai-Kumeu. The place least provided with new land was the contiguous metro area of Auckland City.

So for a decade suffering under the idiocy of Auckland Council has seen land costs go up faster than house values. And at the same time infrastructure costs borne by Auckland constructing massive exurban sprawl have also risen faster than house values. Costs soar, whilst values crawl = low building rate.

Typically it's way higher than $2100, more $2500 - $3000.
I can only assume that the $2100 figure is excluding a whole lot of things usually accounted for in the square metre rate

Yeah there’s no way you can build for 2k per m2 in Auckland. More likely double that.
I guess if you happened to find a flat plot with all services, big enough for an out of the box single story home where half the house is actually garage then maybe.

Build more apartments - that's great news! As long as it's not next to my backyard..

I doubt very much that 120m2 in apartment building cost as little as $2100/m2 unless that excludes the bulk costs of consents, contributions, water meters, and other common expenses like groundworks, landscaping etc .... this number sound like quite low standard of building if it is true...... I stand to be corrected by the people who price projects in the industry today but T/Hs and Aparts would cost more like $2500 - $2800 per m2 ....
So, in Auckland, there is nothing under $550 for a new 2 dbrm ( 67-80m2) and 650 - 800K for a 3 bdrm 120m2 as far as I know !!
Please remember that buying into these relatively lower cost units comes with an ongoing $3000 - $5000 pa ( at best) body corp or outgoing annual bills that need to be added to your annual mortgage payment increasing by about 3-4 % a year ( including insurance) !! that would be an additional 90 - 150K for the life of your mortgage to enjoy the landscape, lifts, and other maintenance and cleaning serves of common areas and pay few people to admin that !!

On the other hand , here is some Good News for FHBs and Not so good News for Renters
Finally the industry is cleaning itself .... I suspect if true, rents will Go up much more than we expected this year..... thanks to Labour ....

An excuse for landlords to put the rent up, it must be a day ending in "y"...

Have you considered that those who are currently renting will then buy those houses? Those houses don't magically disappear, meaning there's an equilibrium renters and new home owners.

Anyway, a good sign that those who could never afford to own multiple houses, and only rented them from the bank in order to access capital gains are getting out of the game.

Out of interest when's your rented portfolio up for sale?

Lol. well if it makes you feel better , Never !. ... my kids will enjoy great passive income for years to come .. and they shall never pay CGT either !.... :)
There is a difference between speculators and real Property Investors ... hope you have noticed that ....
BTW, most renters cannot buy the properties they live in ... and , rents will increase because of short supply and heightened competition's about market prices....

There are some exciting changes in the wind for tenants;

2018 will prove to be an interesting year for Landlords and property speculators as they try and steer through the changes that are to come. With today's yields as paltry as they are, its all about capital gains (now in the rear vision mirror), tapped out tenants well into the future and to top it all off, compliance costs.

Speculators/Property investors tomato/tomato a particularly virulently putrid tomato mind.

In fact I'd liken them both to corpse flowers, filthy, disgusting and repugnant, unfortunately for everyone else specuvestors don't bloom only once every few years.

NZ Herald article 12-Jan, Mum and Dad investors fleeing property;

I suggest that now that this cycle of capital gains are in the rear vision mirror, yields are just not high enough to attract fresh investment. A prolonged period of weakness is ahead until yields reach a point to reflects the updated role of being a Landlord.

Ummm – don’t also want to upset the apple cart - but can we please stop this moronic nonsense from “investors” that sell their rental properties which then regrettably, somehow, magically disappear - apparently removed from the market forevermore.
This self-serving drivel is simply an embarrassment to all that utter it.
I apologise to any that I may offend – but really!!

Ohhh Soldname's envy and jealousy smells particularly strong today

Increased volume of houses on the market with less people buying, less foreign buyers, more building consents, harder borrowing conditions. Wonder what that would mean for prices.

Interesting times.

Indeed, I read that potential sellers of residential real estate are possibly holding back and waiting for better times – and quite possibly a prudent move, I am lead to believe.
But waiting for what – a further constraint on unfettered migration, a rise in borrowing costs, or a rise in available new builds.
These would seem on the surface to be odd things to wait for if you wished for a betterment in your personal financial position, or sadly if needed to sell.
However, it’s early times in the new year – so perhaps best to wait, but still a question mark on this waiting business I think.

custard, you are spot on in suggesting a lot are holding off selling and this was reflected in the accelerating Barfoot and Thompson listing dropout rate. Patience is not something to which the self entitled are accustomed and eventually, speculators will reset their aspirations from getting out with a profit to just simply getting out.

The serious action will occur if the herd start believing houses will only get cheaper tomorrow. We are some way of that point. There are a lot of pins ready to drop that could easily set this in motion.

"Pride gets no pleasure out of having something, only out of having more of it than the next man... It is the comparison that makes you proud: the pleasure of being above the rest. Once the element of competition is gone, pride is gone" - C.S. Lewis

Axing negative gearing would benefit three-quarters of household and lead to a surge in home ownership

An Australian point of view, complete with 'Rents will rise!" rebuttal, but at least the discussion is 'out there' in a way that it's been suppressed until recently (as best as the industry lobbyists can achieve) and even any downside doesn't look too onerous?

"Eliminating negative gearing leads to a 5.5 percent increase in the homeownership rate to 72.2 percent. House prices would fall by 1.7 per cent while rents would rise by 2.4 per cent."