New dwelling consents were up strongly in Auckland, Wellington and Canterbury in August

New dwelling consents were up strongly in Auckland, Wellington and Canterbury in August

The number of new homes being consented continued to gallop along at a healthy clip in August.

According to Statistics NZ, 3261 new dwellings were consented throughout the country in August, down slightly from 3420 in July but up 6% compared to August last year.

In Auckland 1407 dwellings were consented, up 8.4% on the same month last year, in Wellington 225 new dwellings were consented (+11.4%) and Canterbury shows no sign of slowing down with 511 new dwellings consented, up a whopping 29.7% on August last year (the chart below shows the trends in all regions).

Most of the growth was in new townhouses and home units, with 735 of them consented around the country in August, up 47.9% on a year ago.

However, stand alone houses remain the most common type of new dwelling with 1955 of them consented in August, up 4.0% on a year ago.

There was also strong growth in retirement unit numbers with 231 of them consented in August, up 20.9% on August last year (see the second chart below for the national trends in building types).

On an annual basis 35,658 new dwellings were consneted in the 12 months to August up 8.8% compared to the previous 12 months and up 48% compared to five years ago.

However while construction of new dwellings continues to steam ahead, it appears people are spending less on renovations.

The total value of consents issued throughout the country for dwelling alterations was $181 million in August, down 4.8% compared to August last year.

On an annual basis the value of alteration work consented was down 5.5% on a year earlier.

The total value of all consents issued for both new dwellings and alterations was $1.394 billion in August, with residential construction activity now running at more than $15 billion a year excluding the cost of land (see the third chart below for the annual change of the value of consents issued).

In a First Inpressions newsletter on the figures, Westpac Senior Economist Satish Ranchhod said residential construction activity was likely to remain high for some time.

"We're expecting a strong rise in construction activity over calendar 2019 and today's result supports that forecast," Ranchhod said.

"Further ahead we expect a strong level of home activity for an extended period to address existing housing shortages and keep up with population growth.

"That's reinforced by the high number of demolitions occurring.

"But while the level of construction activity is expected to remain elevated for some time, beyond 2020 we don't expect to see the sort of large increases in building activity that we've been seeing in recent years," he said.

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Building consents - residential

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Building consents - type

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Building consents - growth

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Growing by the day..

I remember not so long ago. Any thing around the 600 sounded like an achievement for Auckland..

The new trend is now over 1400.. and as they get more of the prefabs going the better

Nice to see that big boost in townhouses and units especially.

This is good news. A steady growth in pipeline of construction work around the country should keep large swings in activity, like the ones seen in 2015-17, at bay.
Being one of the few capital-intensive economic sectors of NZ, our socioeconomic well-being largely depends on the long-term stability of this sector.
Further positive reforms in RMA, government procurement etc. should be well-received by the industry and the broader domestic economy.

Great news. I said things would be slowing by now, and I was wrong. And it's good I was wrong.
Let's see what the figures are at year's end, though.

For design this has been the busiest year I can remember. There's still a lot of design work in the pipeline and into next year. For getting construction projects going it's not possible to spend the money fast enough. Construction isn't going to slow for a year or more. Look to other sectors of the economy to see what is slowing.

geez fritz... im betting on Auckland touching 18k by feb....

OK, let's see where we are end of this year, early next.
Resource consents, a front end indicator, are slowing.
And several construction firms have gone bust, others are teetering.
Hope I'm wrong and you are right - continuing high levels of housing supply will help address housing costs.

For the property developers they need volume to grow and the need pipeline so independent of the struggles they are having to shift units they are still planning on building more.i reckon these consents will take another 6/12 months to come off the boil as the reality of stock levels comes home.

I'm slightly sceptical of these ANZ business confidence reports. On one hand the banks are promoting the story of 7% property price growth, on another they are reducing credit appetite and restricting borrowings.

Now we see a doom and gloom business survey - as you suggest they don't have a consistent story. It's almost like they are feeding the anti government story to try and get National back in ....

Do you still fall that cra#

Agree Cowpat.

All the indicators in that report are going down, except unemployment expectation going up.

An increase in consents could be large developers who can't/won't stop inspite of a market not existing for the finished product. What I would also be watching for are consented projects being onsold. While some firms specialise in only taking a development to consent and then selling on, if you see end developers selling the consent on, then you know something does not add up.

And finally, they are not called boom and bust cycles for nothing. I still see far too much of the wrong type of property being built in the wrong location and then advertised for the wrong price.