Strong growth in the number of new dwelling consents continued unabated in September, with 3347 new consents issued in the month, up 30.8% compared to September last year, according to Statistics NZ.
In the 12 months to September 36,446 new dwelling consents were issued, up 12% on the previous 12 months.
That was the highest number of new homes consented in any 12 month period since the 12 months to October 1974 and still well below the all time record of 40,025 new dwellings that were consented in the 12 months to February 1974.
Growth has been particularly strong for multi-unit developments, with consents for new apartments up 17.8% in the 12 months to September compared to the previous year, while townhouses and home units were up 26.7%, retirement village units were up 17.1% and stand alone houses were up 6.1%.
In Auckland, where population pressures are greatest, the number of new homes consented dropped to 1143 in September from 1407 in August but remained up by 33.8% compared to September last year.
In the 12 months to September 14,634 new dwellings were consented in Auckland, up 13% on the previous 12 months.
Most regions showed double digit annual growth in new dwelling consents with particularly strong growth in Waikato +18.2%, Tasman +25.8%, Nelson +19.8%, and Southland +18.9% (see the interactive chart below for the trends in all regions).
The figures underpin the importanace of the construction sector to the economy, with the value of new dwelling consents hitting $13.54 billion in the year to September, with another $1.98 billion of work consented for dwelling structural alterations and additions, taking the total value of residential building work consented to $15.52 billion for the 12 months to September, up 10.3% on the previous year.
On top of that another $7.58 billion in non-residential building work was consented in the 12 months to September, up 12.7% on the previous year.
The value of all construction work being consented is now running at about $2 billion a month.
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53 Comments
Surprised by the length of this building consent boom.
Great for housing supply though.
This will help keep prices subdued.
The construction boom will remain healthy as long as we don't reach a glut situation. Capacity crunch, compliance roadblocks and capital shortages in the industry will keep construction activity subdued firmly at 'under-supply' levels for much of the country in the absence of full-blown reforms.
Year ending june 2019, Aucklands population grew by 24k, houses completed 10,500... so we are already building about 2k houses more than population growth in Auckland... waiting for sep 2019 ccc numbers
Yep, great news. The spruikers talks about under-supply as a key reason prices will stay up and continue to go up.
Well, now Auckland is building more than enough to keep up with growth, and the recent revision downwards of Auckland's population by 77K suggests there is minimal if any lingering under-supply.
This ongoing strength in terms of construction also casts doubts about the criticism of the government's economic credentials.
Interesting, so the market is acting in all respects like there is an undersupply, but actually that is evidence of no undersupply. Fantastic news.
Construction booms often overshoot.
Remember too that all the rhetoric over the past few years is how under supplied Auckland is. We know that is a massive exaggeration, but developers have fallen for it.
Last I saw Auckland is about -29,000 houses, has this radically changed?
Yes because population had been overestimated by 77k
Isn't it interesting how that fact is swept under the carpet
yes intriguing!!!! (and a bit disturbing, shows how much vested interest there is in the 'undersupply narrative')
When was the population adjusted down, the -29k is a march estimate.
"National population estimates (NPE) from the September 2013 quarter to the March 2019 quarter (inclusive) have been revised to incorporate the outcomes-based migration measure. Stats NZ introduced this measure in 2017, which defined migrants’ travel histories by using the ‘12/16-month rule’. Spread over six years, this change resulted in a downward revision of about 50,000 for New Zealand’s resident population, an average of about 8,400 a year."
That is -6,000 houses needed in Auckland or an adjusted total shortfall of 23,000 houses.
Not sure why you're referring to march 2019, when you have june 2019 figures, which show a drop of 77k
I have found this:
"Of the 67 territorial authority areas, 11 were revised down with the largest revisions to Auckland (-77,400), Christchurch (-8,300), Wellington (-7,400), and Hamilton (-3,500) cities. The largest upwards revisions were to Tauranga city (5,800), Hastings district (3,300), the Far North and Western Bay of Plenty districts (both with 2,800)."
That is 77,400/3 = ~26,000 houses needed in Auckland, approximately the total shortfall. Interesting to be sure and I appreciate the note.
Id hazard a guess its represents a major outflow from Auckland as the total national revision was only -50,000, perhaps due to housing cost. The flip side of that outflow is it may mean there are large numbers of people who would come back if housing became more affordable. But for now, at least only considering the Auckland population, that indicates a balanced auckland housing market like was stated above by fritz.
Build the right dwellings too. There's no worse situation than having a whole lot of capital tied up in 1 bedroom apartments or 4 bedroom homes that won't sell because everybody is looking to buy modest 2 - 3 bedroom homes. A capacity crunch is one thing, a credit crunch is another beast.
In that case it's better to have more bedrooms than necessary
18k for Auckland in the near future...
Is there a way of knowing what type of houses are being built? Is there a chart of this show YoY change?
New to understanding this data.
Click on the Building Consent-type graph. You can get the graphs by building type.
Interesting to see the big boom in townhouses over the last 1-2 years. Makes sense.
"You have 15 missed calls. Caller ID: Ireland"
It's exhausting trying to keep up with the design work for all types of construction right now. So there is plenty more in the pipeline.
I went past a new development yesterday that were 1,2 and 3 bedroom apartments. The billboard stated they are starting at "only" $800,000. That's asinine for a one bedroom apartment to start at, no matter where it is. Until the developers pull their heads and and get reality checks with the prices of what they build, I'm afraid it won't actually solve anything. In the nearly 2 months the sign has been up, they just recently tossed up a "Over 20% sold!" on top of it trying to push that FOMO as much as possible.
Apartment prices are absolutely insane in Auckland. I don't understand why anyone would buy a 3br apartment for the exact same price (or even more) as a standalone house of the same size on a nice section.
Yeah and that's why dwellings consented does not equal dwellings built. There's been a few large apartments marketed in the eastern suburbs over the past 1-2 years that haven't gone anywhere.
Last time I checked the completed / consented ratio was above 90%.
Yep. But I think that may drop.
That's San Francisco pricing. But NZ doesn't have Bay Area incomes.
Or their incomes
Apartment can be sold in bulk to foreign buyer - main target buyer.
Two of them Hammer Hands in the picture require a Drug Test toute suite, unless them Brown Bottles are L&P.....no wonder the quality of some builds is, shall we say, Sub-Optimal.....
I bet that 'house' in the picture keeps the heat in better than the one we live in. Yes, even with the windows missing.
Under supply was never the only reason or main reason. Speculation and money laundering together with no capital gain tax was the main reason.
Foreign buyer ban and money laundering act will help but still their is a saying in Chinesse that give them some time and will find ways to manipulate and get away with rules and ban. Though China government too is going hard on flight of money from China but still one should not underestimate underhand parallel Ecenomy which is and may be bigger.
The only ecenomy for NZ to be Rockstar is housing ecenomy and no government can afford to ignore that reality so even Labour government is bound to tweek the law/ban like ignoring the call of CG to make NZ a rock star ecenomy.
House price have gone to a limit which is simply unaffordable, to many specially in Auckland (Million dollar Plus Houses - How many FHB can buy them) and those million dollar houses to be sold need foreign money (not on NZ wages) , money laundering and in absence of Chinese will be hard to lift the house prices atleast in near future till the time - the current high price catches up with wages in NZ or till the time NZ governments changes the foreign buyer ban or money Laundering bill like the GC.
Though must admit have seen good number of Chinese in recent auction and actively bidding like old times....So have they found a way to manipulate....
So called experts amd media may not accept now but if it continuees will be forced to acknowledge and headlines will change.
Wait and Watch.
Good to see the 'Mates in construction' mental health initiative got launched yesterday, the sector sure needs it. Looking at the horizon its hard to understand why anyone should be on minimum wages and zero hours contracts with all the work to be done. Addressing that would help attract more local workers to the sector without a doubt. On urban housing renewal alone theres more than can be handled by the existing workforce and to top it off the Akl convention centre now has to be rebuilt...
Anything to bring prices down. The median house price in the US is only $US237k/$NZ369. There are decent houses in the US in some good small and medium sized US cities way under NZ prices, and the US market is quite elevated. Something has to give.
Something doesn't have to give. We are different, and immune to the issues that other countries face.
We are a safe haven, everyone wants to come and live in NZ.
We haven't had a major property correction before, which means we never will.
NZ is different. Repeat after me.
Ashley Church says so.
Of course.
A search of US prices on Zillow is very revealing as to just how expensive NZ prices are, including in the fastest growing smaller US cities, of comparative size and bigger.
Yes it's quite revealing.
NZ property is a RIP off.
VOR. This is going to hurt a little, please close your eyes and do not read on.
House prices nationwide are tipped to soar by 20 per cent over the next four years | Stuff.co.nz
https://i.stuff.co.nz/business/property/113453987/house-prices-nationwi…
If you had any balance you might also note that another economist quoted in the article doesn't think the rises will be that great.
Treasury are often very wrong.
Excuse me for not going by predictions like that, and looking at the quite ridiculous fundamentals instead. The US Fed and nearly every economist never saw the last US housing crash coming, so take the official predictions with a grain of salt. It could well go higher but the bigger the bubble the bigger the drawdown.
Remember the US housing crash set off the Global Financial Crisis in 2008 which ENDED THE BULL RUN of the PREVIOUS 5 years. I know you didnt read the article due to the Graphic Content contained in it so for your benefit here is the opening premise ... "After a long overdue PAUSE..."
Of course you would not agree you are trying to compare two different things
It’s fine to compare world housing markets, it’s very useful. It’s when we ignore that ours is out of whack that it’s problematic. We really are not different down here.
Just maybe it isnt ... as they said it will rise.... or are you telling us you know more
I’m a value investor. I see a late credit cycle with very loose credit. The tail is still wagging in the NZ regions. There’s better value to be had elsewhere in the world but the bargain opportunities have been dwindling over the past few years (yes very long bull run). NZ sharemarket is overvalued too. Good time to hang on to our wallets.
Agree. Anyone who feels that ecenomy cycle is one way is grossly wrong. Housing market boom is over for few years to come despite low interest rate but YES FHB should look for a deal and buy a home for long term and will not go wrong.
Agree. Anyone who feels that ecenomy cycle is one way is grossly wrong. Housing market boom is over for few years to come despite low interest rate but YES FHB should look for a deal and buy a home for long term and will not go wrong.
Yay!!!!!
"buy a home for long term and will not go wrong."
Youre telling the story VoR (I wouldn't want to disagree and then upset your train of thought)
Have you heard the word : Vested Interest and lobbying.
All the energy and debt going into non productive assets. Once the job is done we can sit around and look at each other and wonder...what shall we do next...import some more people to build more houses for??
Its actually a very good time to consider cashing up and going off shore, I believe the Country is going to go into a severe crisis shortly due to sever and protracted under investment finally causing the collapse of the country and it may not survive. Our houses are far over valued only underpinned by a seemingly endless stream of foreigners who arrive here full of the 100% myth only to be horribly disappointed by low earnings and even worse standards of housing than where they just left then set about fleeing to Australia as soon as possible...and penny less. Word gets around and if we lose that stream the whole business model collapses. The writing is on the wall this time, case in point...our fire service just failed to extinguish a relatively tame fire in the Akl Convention centre due to 3rd world equipment and lax engineering standards. See you in Canada... where its better.
The -4th -estate.
,
Well, I wish you well. I would suggest somewhere in South Vancouver like Steveston,though you might not like the house prices there.
Your analysis of NZ is thin and that’s being kind. Yes, there are significant issues like our appalling construction industry and our poor productivity record, but the idea that the country is on the verge of collapse is bizarre.
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