New dwelling consents in Auckland hit record high of 14,000 in year to June

Property

New dwelling consents hit a record high in Auckland but are lagging behind in many other regions

30th Jul 19, 11:28am by Greg Ninness

The number of new homes being consented in Auckland is at an all time high, according to Statistics NZ.

The latest data shows 14,032 new dwellings were consented in Auckland in the 12 months to June, the most that have ever been consented in any 12 month period in the region.

That was up 13.4% compared to the previous 12 months and more than double the 6873 new dwellings that were consented over the same period five years ago.

In the month of June, 1152 new dwellings were consented in Auckland, up 15.1% on June last year and up 27.2% on June 2017.

Statistics NZ said most of the growth had come from multi-unit developments such as townhouses and apartments, which accounted for around half of all new dwellings consented in Auckland.

However, growth in housing supply in other parts of the country appears to be lagging new supply in Auckland.

"While the number of new homes consented in Auckland is higher than the previous 1970s peak, the total of all new homes consented in New Zealand remains below an all-time high," Statistics NZ construction statistics manager Melissa McKenzie said.

There were 34,761 homes consented throughout the country in the year to June compared to the record high of 40,025 in the 12 months to February 1974.

In Northland, the Bay of Plenty, Taranaki and Canterbury, new dwelling consents have fallen for the last two years in a row.

However, they have been steadily rising over the same period in Hawkes Bay, Manawatu-Whanganui, Nelson, Otago and Southland.

The interactive chart below shows the consent trends in all regions.

In the 12 months to June, consents were issued for 21,401 new stand alone houses throughout the country, up just 1.1% on the previous 12 months, 4110 apartments up 4.8%, 2240 retirement village units up 11.9% and 7010 townhosues and home units, up 21.7% - see the second interactive chart below for the long term trends in consents by dwelling type.

"We think a peak in the nationwide construction cycle is approaching and expect this to occur in 2010," Westpac Senior Economist Satish Ranchhod said in a First Impressions newsletter on the figures.

"Building levels are still expected to remain elevated for some time.

"But after this year, we don't expect to see the same large increases in nationwide construction-related spending and employment that we did in recent years."

The comment stream on this story is now closed.

Building consents - residential

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Source: Statistics NZ

Building consents - type

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Source: Statistics NZ

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61 Comments

by tothepoint - d… | 30th Jul 19, 11:36am 1564443367

Good news! A boost to Auckland’s housing construction will provide a boost to Auckland’s economy.

All up, it’s evidence of confidence in Auckland’s future.

TTP

by Due Diligence | 30th Jul 19, 11:37am 1564443453

Yes, good news, particularly the fact that most growth came from multi-unit developments such as townhouses and apartments. This is the answer to Auckland's affordability issues.

by Retired-Poppy | 30th Jul 19, 12:22pm 1564446168

...yes, agreed. This is an encouraging development. I know you will join me in hoping developers can reach 20,000pa and flood the market.

Fingers crossed.

by Dgm | 30th Jul 19, 12:23pm 1564446198

i can hope you're being sarcastic :)..

we dont want another leaky home crisis..

only hope they can repeat what was done in the 70's.. strong healthy homes..

by Retired-Poppy | 30th Jul 19, 12:58pm 1564448325

Dgm, agreed. A flood of strong healthy, well insulated homes, reduced prices and of course reduced rents. Spruikers, please feel free to factually argue how this is totally impossible.

by Laminar | 30th Jul 19, 1:28pm 1564450122

Ill stand in for the spruikers; a 'flood' of houses coming on line, sufficient to meaningfully drop prices, would then destroy the development industry and in turn cause a shortage.

by Dgm | 30th Jul 19, 1:57pm 1564451845

spruiker sure you are!!!

by Retired-Poppy | 30th Jul 19, 2:10pm 1564452619

Laminar "destroy the development industry and in turn cause a shortage"

"rinse-repeat"

by Laminar | 30th Jul 19, 4:01pm 1564459282

Whipsaw economics is less efficient in a multitude of ways. Ideally we get long term, slightly above demand construction, that blunts price gains to below trend for perhaps a decade.

by Retired-Poppy | 30th Jul 19, 4:10pm 1564459831

...that would be the desired outcome. Although, given the current wafer thin margin state of our construction industry?

by Laminar | 30th Jul 19, 4:28pm 1564460913

Yeah i get you and i dont know. Changes to government regulation, anti trust, trying to get materials costs down perhaps. Difficult problem that seems to be out of control.

by Dgm | 30th Jul 19, 11:34am 1564443262

wow massive, great to see that momentum continue..

hopefully the KB reset will help to build more homes in the regions too, it would be a failure to boost supply in one region and ignore the rest..

by jimmyH | 30th Jul 19, 11:34am 1564443252

So our per capita rate of building,at maximum stretch is approximately Half of what we could achieve going on half a century back. Even when the near majority of projects are high density multi-unit?. ..hmmm. Were we lamenting productivity gains(or lack of) here, recently?

by Dgm | 30th Jul 19, 11:41am 1564443662

look at the improvement in the last 1 and a half years compared to the previous 9 years!!!

by dictator | 30th Jul 19, 11:45am 1564443955

But John Key and Bill English said there wasn't a housing crisis therefore nothing needed to be done for 9 years. In fact nothing was done for 9 years.

by Advisor | 30th Jul 19, 12:03pm 1564445035

Clearly it was in the best interest of the previous leadership to boost housing demand while simultaneously constraining supply.
Skyrocketing rents, building costs and house prices threatening our future living standards as a nation wasn't enough to thrust JK's team into action.

by Dgm | 30th Jul 19, 12:24pm 1564446265

and yet he had the guts to stand on the podium over the weekend, flaunting the merits of the National government..

by Sluggy | 30th Jul 19, 12:54pm 1564448074

"guts" ? gall

old teflon johnny - smile and wave

by dictator | 30th Jul 19, 1:29pm 1564450162

Don't forget the guts of not intervening in ANZ trying to concealing information from the people who invested in Ross Asset Management, or the dodgy dealings with Hisco.

by Dgm | 30th Jul 19, 1:59pm 1564451942

Hail the National Party and its speculators... Doomed the people of NZ (other than the 45%)

by CourtJester | 30th Jul 19, 2:20pm 1564453209

I've got a feeling that a good portion of that 45% didn't benefit from their (in)actions. A lot of right wing voters seem to be the so called "temporarily embarrassed millionaires".

by Dgm | 30th Jul 19, 3:45pm 1564458316

good point

by xingmowang | 30th Jul 19, 11:38am 1564443523

No matter which political parties got lucky and sat behind the steering wheel.

NZ, for the foreseeable future, will depend on mass immigrants, dairy, tourism, and international students.

These dependencies are party irrelevant. The party's job is to give the benefits to their voters and pass the costs to their haters.

by Glitzy | 30th Jul 19, 12:20pm 1564446005

Comrade brother, time to invest in better translation software.

by Dgm | 30th Jul 19, 12:25pm 1564446329

the software is getting confused!!!

by Toppertee | 30th Jul 19, 12:55pm 1564448150

We just need to make sure that his comrades don’t get caught up in the current challenges in the Chinese banking sector and decide to walk away from their 10% deposits. I wonder how many of these tower blocks have been agreed pre-sale on 10% but haven’t completed yet? Mikekirk29’s number for apartment sales this year paint a pretty woeful picture of that sector of the market.

by Voiceofreason | 30th Jul 19, 12:18pm 1564445912

Am I the only one who thinks we are heading for overshoot in Auckland? Given that a substantial shortage is questionable (low sales numbers, plenty of stock), sure it’ll definitely bring the prices down, but an oversupply is a good way to get a crash.

by CourtJester | 30th Jul 19, 12:51pm 1564447906

But Tony Alexander said we are building much less than Australia, so there can't be a crash. (NZ: 1.8% of housing stock vs Aus' 1.9%, yep, a huge difference). Trust him, he's an EXPERT!

by BigDaddy | 30th Jul 19, 12:35pm 1564446958

Most of the increase in consents has been been in multi level buildings such as apartments. However as we only too well know, many apartment projects never proceed and take years to complete if they do. Too often consents are sought with no intention to build anything, but only to enhance the land value and on-sell for profit. The demand for cheap apartments is lack lustre at best and we face the problem, common in Austraslia and many other countries, of over supply and bust a boom, not to mention shoddy workmanship. Hardly a week goes by without yet another construction company going bust ( yesterday Auburn Developments) which surely says that the demand is not as strong as the figures suggest.

by Voiceofreason | 30th Jul 19, 12:43pm 1564447405

I agree and I hope we’re not repeating the Sydney situation.

by CourtJester | 30th Jul 19, 12:54pm 1564448067

"However as we only too well know, many apartment projects never proceed" - Can you point me to your source please?

"and take years to complete if they do" - which is almost irrelevant. The ones consented 2 years ago will be finished this year. Then the ones consented last year will be finished next year, and so on.

by Advisor | 30th Jul 19, 1:51pm 1564451515

The Chief Economist at AC has put out an interesting stat: 35%; that's how much faster the average consented dwelling is being built in Auckland compared to 2 years ago.
This enhanced productivity, he believes, is due to the rising proportion of townhouses, apartments, units, etc. being built.

by CN | 30th Jul 19, 2:24pm 1564453448

CourtJester,

"However as we only too well know, many apartment projects never proceed - Can you point me to your source please?"

Insufficient pre-sales levels reached (at their desired selling price level), leading to inability to obtain development financing, leading to project cancellation.

1) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
2) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11…
3) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11…
4) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11…

If there was a housing shortage in Auckland, these projects would have been sold out due to strong demand.

One of the issues is that these projects are too expensive for the local population on local incomes and hence there is no demand at these price points.

If these projects were priced at the $600,000 price range, there might be more demand and the projects might have been sold out. However at that price point, the project is economically unviable for the developer, possibly due to a high price paid for the land.

This issue is not a shortage of housing, the issue is a shortage of AFFORDABLE housing.

by CourtJester | 30th Jul 19, 2:23pm 1564453417

Sorry, I should have better specified my request. I'm more interested in an official source for an actual figure, say, percentage of apartment projects that fail after getting the consent, but before they're built.
Or a figure of consented vs actually built dwellings would also suffice.

by Greg Ninness | 30th Jul 19, 4:39pm 1564461557

CJ, we report regularly on Code Compliance Certificates issued vs Building Consents issued by Auckland Council, but don't have national figures for CCCs. Here's the last update we did, which may be helpful. https://www.interest.co.nz/property/100382/number-new-homes-being-completed-auckland-could-increase-about-third-over-next-two

by Fritz | 30th Jul 19, 5:06pm 1564463210

I strongly suspect that the divergence between BCs issued and COC issued will widen

by Fritz | 30th Jul 19, 1:34pm 1564450486

Well put from someone who knows the game well.

by mikekirk29 | 30th Jul 19, 1:43pm 1564451022

Other problem with apartments is that they are not selling them: 39% drop in apartment sales in Auckland in last 6m compared to 2018; in the price bracket below $800k it is 33.8% drop. FHB are not being given what they want in terms of provision in right place. people with kids do not usually want an apartment and if they get one and need more room for additional kids, they have to move and then faced with shortage of affordable 3 bed stock.
This is what happens when government is more interested in allowing lots of immigration b4 they have a plan as to where they will live and the school roll etc; in other words, poor or non existent planning. That is because governments nowadays are ideologically prejudiced against State action or planning.

by guwop | 30th Jul 19, 2:01pm 1564452117

The problem is that the average Kiwi doesn't want A) inner-city living nor B) apartment-living. Look at old-skoolers like TTP: they hate apartments. That is why our inner cities are currently inhabited by those already familiar with the One-Child policy. More power to them!

by Lapun | 30th Jul 19, 2:18pm 1564453110

Not so sure. I know a few elderly Kiwis who have moved into retirement village apartments (and they are happy) but the person most adamantly against apartment living is a 75 year old Chinese who was brought up in a Hong Kong apartment - she equates apartment with deep poverty.

by Advisor | 30th Jul 19, 2:23pm 1564453423

Sooner or later Kiwis will have to adopt the stuffy, inner-city way of life. It doesn't look like the rapid urban intensification is going to slow down anytime soon, now that we know all political parties have very limited (in case of some parties, it's quite the opposite) intention to contain, or even mildly reduce, NZ's population boom.
Like it or not, the future of NZ cities looks more like Manila than Atlanta, GA.

by RickStrauss | 30th Jul 19, 4:10pm 1564459838

I don't think that's necessarily the case. I see a big part of the problem being the average Kiwi does not want an overpriced apartment (for the size) that's got a good chance of costing even more once the building is discovered to be shoddily built and/or leaky or constructed of HardiLeak papier-mâché cladding.

$800k for a 2-bedroom apartment in Albany? You've gotta be kidding.

People wanting more than $800k for 80sqm in town? That's a tad much for many local buyers.

Compare that to what you can get in San Fransisco for sub $800k, a place with just as bad an affordability reputation but far higher salaries available.

by Fritz | 30th Jul 19, 9:03pm 1564477418

yeah exactly. I'd buy a compact 2.5 bedroom apartment, circa 80 sq metres, if it were well built (not luxury) for sub 700K. I'm sure there would be many that agree.
But those properties do not exist.
Apartments in Auckland are generally a total ripoff.

by pin3cone | 30th Jul 19, 12:57pm 1564448245

Just to move away from Auckland for a second... two weeks ago I had a communication from Kiwibuild that the first Kiwibuild development for Wellington (Mt Cook Apartments) was about to be put on the market.

Last week, another communication saying due to the surprising (LOL) amount of interest, they would not be listed, and would instead be balloted.

Then, just yesterday, an email titled "Bumper interest in Monark":
"The level of interest in the Monark apartments in Mt Cook means the planned ‘Information Evening’ can no longer be accommodated. Instead, the display suite will now be open from 9am-5pm for the entire 12-day ballot period."

It could be that the location has a big part to play here and any savvy FHB who meets the criteria will see the obvious opportunity to grab a close-to-city apartment at a price you'd never find from a private developer, but I still maintain that Wellington has an enormous shortage of housing for FHBs. Yes, the average price isn't as much as Auckland, but on a number of dwellings basis, we're in struggle street ya'll.

by northman46 | 30th Jul 19, 12:59pm 1564448379

Yep. Wellington is quite the struggle for FHBs. Very slim pickings

by mikekirk29 | 30th Jul 19, 1:38pm 1564450735

Auckland is a problem, and it is this: the type of housing that young families is not being built in any greater numbers than 6 years ago. And those houses need to be for rent and 3 rather than 4 bedrooms, closer to the city with decent bus routes. Instead 4 bed is being built out the outskirts or even in Rodney at 35km away. Smaller units in Auckland is no good for people with more than 1 child and most apartments are not either.
We really need collation of data to show who is buying houses and townhouses and who is then renting them out, and to whom. Without that data over a time period of say 12m, there is no way to plan provision. Sorry to those who do not like planning and State provision but the only way this stuff is going to get built for families that need it at affordable rents, is for the State to build it. Investor buying has taken bigger hit in last 3 years as no capital gain and yields are too low to incentivise them. So, rents are bound to shoot up on the remaining suitable stock. That means FHB are pushed further away from deposit target. Also, disposable incomes are taking a hit as more and more people rent compared to being in own house, even with a mortgage. Cost of mortgages falling and rents rising: recipe for more social division.

by brisket | 30th Jul 19, 2:18pm 1564453091

Seems to me that there's insufficient price differential in different parts of the market, post-boom. A 2brm unit in Greenlane might be $750,000; on the same street, a large (rundown) villa on a section 4x larger might go for $1.2m. The price of the unit was pushed up by FOMO in the boom, and it's in a price range that is still accessible to a relatively large number of people; whereas the price of the house is constrained because there aren't many local buyers who'll get a mortgage for $1.2m on income alone, they have to have existing equity or etc.
I'd argue that the unit is overpriced (well, both are, but the unit more so). There should be more than a 50% price differential for these radically different properties. But the prices don't bear much resemblance to real value -- they've been driven by fluctuations in sentiment and credit instead.

by CourtJester | 30th Jul 19, 2:33pm 1564454019

I agree, these are strange times indeed, with some bizarre prices. 2br apartments for $750k, where you can buy a 3br house with land in the same street for $850k. Or a 5br house on an even bigger section slightly above $1 million. There's a push up from below in the form of FHBs with rich parents and FOMO, while there are no buyers at the $1 million+ level, pushing those prices down. Everything not lavish is between $800k - $1 million on the North Shore.
I've got a feeling that prices in the lower end will start dropping once developers realise they're better off selling now with 20-30% discounts, than staying in the market. Those 2br apartments would be a decent buy at $550k or so.

by Foyle | 30th Jul 19, 1:49pm 1564451341

There has been pretty steady year on year growth in build numbers for about 8 years now, from the nadir of the GFC when it seems most of the existing builders departed the market (headed overseas?). Shows the dangers of choking off house or infrastructure building, as it takes a very long time to rebuild a specialised labour force. Take note Coalition - your shuttering of motorway building in NZ is going to take a very long time to turn around.

by RickStrauss | 30th Jul 19, 8:52pm 1564476739

What shuttering are you talking about?

by Gummy Bear Hero | 30th Jul 19, 2:20pm 1564453209

... there were 40 025 houses consented in NZ in 1974 , when we had a population of just 3 025 000 . . adjusted for the current 4 974 000 of us today , that would equate to 65 800 consents in 2019 ... roughly twice what we've actually achieved . . 34 671 ...

Sorry Greg : just rained all over your parade : haaa ha ! ... but it does prove a point ; back in the day , we just got it done ... no RMA , no nimbies , less red tape , cheaper consenting process , simpler building code . .. yadda yadda . .

by CourtJester | 30th Jul 19, 2:37pm 1564454221

No city planning either. Gotta love the urban sprawl that was created! It's gonna take 30 years to fix. If that ever happens.

by Voiceofreason | 30th Jul 19, 2:23pm 1564453418

Oh, I've just seen the video from Joe Wilkes saying how he was banned from commenting here last week after questioning the number of cheerleading articles (about the property market and economy), and criticising that there are very few from alternative perspectives. Pity, I found the data and info he provided here to be valuable.
I was warned a few weeks ago as well, so don't be surprised if I am disappeared. It would be a first for me on any website anywhere in over 20 years of being on the web.

by Glitzy | 30th Jul 19, 2:37pm 1564454253

I too am on a yellow card. Perhaps it's a badge of honor :)

by Voiceofreason | 30th Jul 19, 2:58pm 1564455522

At least we’ll be able to say we tried to flag what high risks there were in 2019, when it seemed so few knew.

by Plutocracy | 30th Jul 19, 3:07pm 1564456078

To be fair I think he might have questioned the sites independence and alleged that it was receiving income from the realestate industry to push a particular viewpoint. I could see how this could rile people up but I'm disappointed that a warning wasn't sufficient as he was a nice counter-balance to TTP/DD/HW spruiking.

by Voiceofreason | 30th Jul 19, 3:36pm 1564457805

Yes part of his view is that the NZ media in general is currently captured by real estate vested interests, so not enough info on the current level of risk, in relation to the amount of debt people are taking on, is getting out to the public - especially first home buyers .

by Plutocracy | 30th Jul 19, 3:42pm 1564458167

Thanks I'll have to check it out and see what he said.

I'm not sure of this sites particular demographic but it may be useful for him to raise these topics on alternative social media sites so that it's more likely that a younger demographic will hear his contrarian viewpoint as opposed to the MSM narrative.

by house hunter | 30th Jul 19, 4:47pm 1564462078

I'm off the opinion that there has been too much in the way of name calling and personal attacks in the comments, so welcome any attempt to clean things up. I will miss Joe's content though. Hopefully the rest of us can keep things civil. It's OK for others to have different opinions - in fact it's what makes the discussions interesting.

by Voiceofreason | 30th Jul 19, 5:22pm 1564464160

Yes, I've never resorted to name-calling, ever, which is probably why I've never been banned from any site or network. Civility and reasonable debate is necessary, even when anonymous. I believe that even calling out editorial policy and perceived biases is legitimate when well-reasoned and people should not be banned for that. Let's have that debate out in the open instead of censoring it.

by b21 | 30th Jul 19, 3:50pm 1564458622

Good news, specially for those that still think there's a housing shortage. Let's just hope all is built strictly according to standards and we do not have surprises in just a few years because everything was rushed to make it before the end of the bubble.