New home completions up strongly in Auckland but there are signs the supply may be starting to peak

New home completions up strongly in Auckland but there are signs the supply may be starting to peak

There was a sharp increase in the number of new dwellings that were completed in Auckland in October.

Auckland Council issued 1462 Code Compliance Certificates (CCCs) for new dwellings in October, compared to 1172 (+25%) in September and 865 (+69%) in October last year.

It was the highest number of CCCs issued by Auckland Council for new dwellings in any month since interest.co.nz began compiling the figures in June 2013 and more than three times the number issued in October 2014 (see graph below).

New dwelling completions have been particularly strong in the six months between May and October this year with 7359 CCCs issued during that period, which was up 30% compared to the same period of last year.

However, there are also signs that the supply of new homes in Auckland may be starting to peak.

CCCs generally lag building consents by around two years and consents for new dwellings in Auckland have also been rising strongly for the last seven years, with CCCs matching those figures quite strongly two years later.

However, in September and October, the number of new dwelling consents issued in Auckland dipped below the levels of the previous four months and were overtaken by the number of CCCs issued.

If that trend continues, it would suggest that the current residential building boom in Auckland may be close to peaking, and the number of new homes being built in Auckland may start to decline form current levels in 2021, although that could still change with some very big housing projects in the Auckland pipeline.

However, two months of figures do not make a reliable trend and the figures are likely to be volatile over December and January, which means it could be the end of summer before an accurate picture of Auckland's long term new housing trends emerges.

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Any idea how many are new HNZ units? Everywhere I see state units being built in tower blocks. Hav also received calls from agents asking whether we want to take an HNZ lease on a block of units.

It's been about 5-10% of the total in 2019.

Re the question of HNZ and their growth. Not really all that fantastic. In fact pathetic. 16/17 -800, 17/18 + 400, 18/19 +1300.
Compare that with the number of private rentals being brought to the market 16/17 +16300, 17/18 +16700, 18/19 +17600
Sure HNZ is a small player in the market compared with the private market. Even compare the increases on a percentage basis they are underperforming despite all my tax payer subsidies given to them and the lack of tax they pay. What else would you expect for a government owned company.

If you drive around Auckland you'll see the sites they are developing, they haven't completed much yet, but there is going to be a huge number being completed over the next few years. Mt Roskill and Onehunga there are large swathes of land that has had the old 1970s state houses removed and all the earthworks and stormwater etc being done now, the construction of the actual houses is the next phase.

PS: Housing NZ isn't in it to make a profit, its a social service, not a profit generating enterprise.

Yes but it has to pay its way

Seems you don't understand what a social service is.. And its far cheaper than paying out more in benefits that go to private landlords, or paying to keep the destitute locked up in prison, which is where they will end up if they are left to turn to crime to support themselves.

Photo somewhat contradicts headline of "new HOME completions…" it would be great to be able to break the figures of new dwellings into: 1) free standing houses 2) townhouses and 3) apartments

most new developments in central auckland will be taking away free standing houses and replacing them with apartments,
if you want more people you need to go up for them all to live here

10
up

Quite right. After all, a new dwelling isn't necessarily a home; it's an asset to be traded for profit and gain, no matter what its configuration is.....

Blimey bw
Aren't you ever going to be positive. FHB buy a house as a home, over time with inflation as an asset that will increase in value but the intention is not to trade for profit and walk away homeless. An investor buys property for a return just like any investment whether it be TD or shares, and why should that be scorned at.
Your comment just simply sounds like envy. Get over being the dgm.

The 2018 census showed that the number of vacant Auckland houses had risen 18 per cent to 40,000 - bw sounds more on the money than you Printer?

Do you really have to attack anyone you disagree with? Why not simply present your view. It appears you enjoy the attack. This is not necessary

I have noticed Printer8 has a chip on his/her shoulder over something. Any excuse to come on here and attack others who have a different viewpoint. Even if those people are not even active participants on a particular article.

No nzdan
I will be critical of those such as yourself who defend prejudice statements. As a society we moved on from making prejudicial judgements following the dawn raids of the 1970s. I take your criticism as a positive.

Mike
Your premise and methodology are seriously faulted so expect robust debate.

"Stop being envious. You're a DGM".

- Robust debate on interest.co.nz

Yawn. AKL need new builds. The plan is up a lot in the center (apartments), up a bit further out and along the transport routes (townhouses), and more sprawl at the edges (townhouses and houses). Lots off opportunity for everyone. More builds gives FHB more options to move away from renting and enjoying the security that home ownership brings. What can be bad about that?

Are you implying an apartment can't be a home or am I missing some subtler point here?

"Lock and leave' apartments blamed for high number of empty homes in Auckland CBD. The high number of vacant properties in Auckland's CBD is being blamed on investors who are holding on to "lock-and-leave" apartments despite chronic housing shortages in the city.

The 2018 census showed that the number of vacant Auckland houses had risen 18 per cent to 40,000. That compares to a 0.1 per cent increase in the previous census period. Empty properties now made up 7.3 per cent of Auckland's private dwellings, compared to 6.6 per cent in 2013.
Auckland Council chief economist David Norman said that was the second lowest vacancy rate for any main centre in New Zealand".
Herald article: https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12270554

Cool, but most of the apartments are occupied, and most of the occupiers would consider those apartments their homes.

So 1 in every 14 house in Auckland is now sitting empty. Is this the "market sorting out the housing crisis" yet? Surely no intervention is needed then...

Well Labour need to do something about the empty home situation in our larger cities that's for sure.

The census "reported" number of vacant dwellings is just another indication of a hopeless incompetent gathering of census data. Goodness it took out the head of department. I know someone employed by Stats department to assist with the census gathering. The way the figures were gathered this time compared with the past is what a change in figures indicates not an actual change in facts.

An apartment is someone's home if not their house.

Since Auckland keeps building more than it can sell the law of economics applies: excess inventory drags on market. The build cycle is out of synch

The length of this building boom has certainly surprised me.
Good, though. It's certainly helping to deal to the supply issues we have in Auckland.

Note to Yvil. Referent Amy prev posts re price rises.
pretty much any decade one takes form 1992 on the rise is 89 - 106%.
The rise 2002 to 2016 (January) was however exceptional: 300% (248k v 745k median)
The rise from 2012-15 (May) was 50%.
1992 to 2019 is only 27 years, so rarely could do with longer data set, as when looking at asset class for stock market, have a far longer time frame to look at.

What's your point mike. Of course most owners would be leveraged so the gains are magnified. And no losses to speak of.

Thanks MK but what's your point?

Just providing info to readers. No point. Except to show perhaps that I do examine prices too!

A glimmer of hope? Spending my entire life savings so far, and massive deductions from my future income until retirement, on a house to call my own. It's so depressing being a prospective FHB in Auckland. I don't believe homes are a good investment anymore, but I need a stable place to live and put down roots.

Was until very recently in the same boat as you, MW. Leaving not an option due to family ties and not feeling like I should have to make way for others in a city I was born and lived 30 years in. Eventually got there with a substantial amount of family help, but they could appreciate that we were going to miss a window for having a family and didn't want to spend the rest of our lives changing schools every time someone decides to sell up from under us. Depressing that as DINKYs we still needed that help and that very few people have that available to them.

Medium term, we figure we have until our (hypothetical) first kid is four to decide where we want to be. At this rate, given the increasing living costs and decrease living standards in Auckland, it is unlikely to be in the 09. If it weren't for family we'd have fled to Aus a long time ago.

Thanks for sharing GV. Exactly the same boat :) both my partner and I won't be able to borrow from our parents as they have their own lives to care for, (retirement and divorce ect) we both earn good salaries DINKY, but prices just seem to be getting further and further out of reach. We will find a way, I'm sure, but if we are so well-off and struggling to get on the ladder, I really feel for those who earn less.

Honestly you should leave. You will have higher disposable income most other parts of NZ (not Auckland or Wellington) or Australia (Not Sydney or Melbourne) - and the chance to buy a house or have a few years off for one of you to look after young kids. It's harder being away from family when you have young kids, but flights are cheap. Make a life elsewhere and you will be far better insulated against job loss or financial downturn or illness than if you are mortgaged to the limits of your ability and you will much sooner be able to get back to having hobbies and life outside of scrimping and saving for the mortgage. Auckland, Wellington, Melbourne and Sydney are no longer sensible choices for people who want families - you will be struggling for 30 years with 2 incomes to pay off a house whereas 5 years in a booming provincial town like Ashburton and you can own a freehold house and start putting money into other things.

I'd love to, I grew up rural. But I have a corporate career, always based in the biggest city of any country. One day I'll be able to work remotely while contracting, but not yet. I am not prepared to give up my career and move away from my family, losing my identity and support networks. Particularly if we are going to have kids - i'll utilise the cushy mat' leave options of my employer and have my family to help out. I'd rather rent for life than move out of Auckland.

I can't help but wonder just how long it will be before many of these new builds start to deteriorate, having been shoddily built?
It baffles me that NZ is prepared to put up with the appalling standards of our building industry. I have no personal axe to grind, but from the outside, it seems to be riddled with a lack of professionalism from top to bottom. Incompetence, greed and outright fraud appears to be the norm, not the exception.
This could be fixed if proper standards were rigorously applied, but that that would cost a lot and slow down the building process and that seems to be unacceptable, even if lives are ruined and sometimes lost.
Of course, all the remedial work adds significantly to GDP and that is sacrosanct; the god before which we must all bow down.