New dwelling completions in Auckland still running at record levels

Property

The number of Code Compliance Certificates issued for new dwellings in Auckland took a dip in April but was still up on April last year

22nd Jun 20, 2:35pm by Greg Ninness

New homes continue to be completed in record numbers in Auckland, despite the recent COVID-19 lockdown restrictions.

The latest figures from Auckland Council show that 1344 Code Compliance Certificates (CCCs) were issued for new dwellings in March.

That was a record for the month of March since the council's published CCC records began in 2013, and almost double the 678 CCCs issued in March 2019. That's even though the most severe COVID-19 lockdown restrictions took effect towards the end of that month.

However there was a dip down to 910 CCCs issued in April as the level 4 restrictions began to bite in earnest, but that was still up by 15% on April last year and was also a record for the month of April.

Code Compliance Certificates are issued when a building is completed and deemed fit for occupation.

The number of new homes being completed in Auckland each year has more than trebled in the last six years, rising from 4027 in the 12 months to March 2014 to 14,528 in the 12 months to March this year.

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41 Comments

by Albert2020 | 22nd Jun 20, 2:45pm 1592793927

Hmmmm, this ain’t gonna end well...

by Chessmaster | 22nd Jun 20, 4:47pm 1592801232

Council keeps approving crap little box townhouses. This will not end well for those buying. Meanwhile no upgrades to our infrastructure. More coverage, more catchments, flooding etc happening more often as a result. Council has no sustainable plans but keep approving to get more rates etc. Banks have to stop lending on these shoebox developments

by hemihua | 22nd Jun 20, 5:35pm 1592804127

I've come to the conclusion it doesn't matter at all... these tend to be sold to investors for rental rather than owner occupied, depending on the quality / price point. Provided interest rates don't go up (and let's face it, how can they without stuffing the economy?) they'll provide the owner with a nice wee yield compared to a TD.

by anla | 22nd Jun 20, 2:58pm 1592794721

the rush to gold... hem... sell

by Foyle | 22nd Jun 20, 3:10pm 1592795424

Good news; the market apparently works and can meet demand for housing. Govt should stick to it's knitting and stay out of it.

by dcnbwz | 22nd Jun 20, 3:55pm 1592798149

Great comedy.

by bw | 22nd Jun 20, 4:12pm 1592799177

A bit dated but probably as true today as when it was written ( as the World tried to recover from an unforeseen disaster - the GFC in that case, and today we have?....)

Neo-liberalism and the failure of housing markets to deliver adequate housing.
The driving forces of globalisation and neo-liberalism over the last 30 years saw a turnaround in housing policies, with the withdrawal of national governments from direct support of the housing sector and a move towards greater reliance on the market to address housing provision. Features of this era were the rapid growth of housing finance markets, deregulation of markets and the associated banking systems, privatisation of the existing social housing stock, reduced investment in new provision and removals of rent control. It is now widely recognised that this market-focused approach has failed to deliver affordable housing for all.

http://www.housingeurope.eu/event-178/where-is-housing-in-the-future-so…

by Fritz | 22nd Jun 20, 5:52pm 1592805131

That nails it. Trickle down my ass!

by Albert2020 | 22nd Jun 20, 11:15pm 1592824512

Only about 10 years too late...record consents at a time when house prices are heading for a correction? Yeah what could possibly go wrong? That’s what happens with boom and bust property cycles

by Independent_Observer | 23rd Jun 20, 8:21am 1592857295

Ireland - massive over build. We have a housing shortage...build, build, build! The young people leave while the market crashes...oh shit, we've got an over supply! Prices fall 60% in Dublin.

by Chairman Moa | 22nd Jun 20, 3:19pm 1592795992

It was fun and games until someone decided to build more houses...

by xingmowang | 22nd Jun 20, 3:23pm 1592796210

Residential buildings are built for coming migrants.

by Fritz | 22nd Jun 20, 3:34pm 1592796844

Which coming migrants?
The Red Army?

by xingmowang | 22nd Jun 20, 4:20pm 1592799648

It would be NZ's fortune if that were the case.

by jimmyH | 22nd Jun 20, 4:40pm 1592800806

Would the comentator care to elaborate as to exactly what he proposes that the benefits are,in having "red army " boots marching on this sovereign soil? Our patience wears thin.

by xingmowang | 22nd Jun 20, 4:49pm 1592801354

if you think only a bit bigger and longer, in a scale of the Earth, the solar system, or the milky way or the universe, resources will always belong to the most advanced because they get used most efficiently and sustainablly and generates maximum values.

by Pragmatist | 22nd Jun 20, 5:36pm 1592804161

China, the most "sustainablly"? LOL, Friday night Comedy on a monday.

by Chairman Moa | 22nd Jun 20, 6:14pm 1592806464

A bit of hacking does help the advancement

by Yvil | 22nd Jun 20, 3:25pm 1592796341

More CCC's issued in April this year when most of NZ was shut than in any month of April prior, that's incredible, there's a lag between applying for a CCC and obtaining it but still...

by Fritz | 22nd Jun 20, 3:39pm 1592797198

I am not sure I would read much into this Yvil.

If new dwellings were very close to completion just before lockdown, there's little poing in not getting COC.

The same will apply for data from May to August.

We are unlikely to see drops till August / September.

by WestieAJ | 22nd Jun 20, 4:49pm 1592801349

Spec builders can only hope that the hundreds of people emerging from Quarantine can afford to rent or buy one of these nice new houses. Travel stats for last 7 days 15-21 June.
https://www.stats.govt.nz/experimental/covid-19-data-portal
NZ Passport Holders Arriving 1459 Leaving 833. Net Gain 626
Other Passport Holders Arriving 1006 Leaving 3347 Net Loss 2341
Total Net Loss of 1715.
Interesting to see how these numbers play out over the next month. Will be an indication of which way the property market will be likely to go.

by RichMuhlach | 22nd Jun 20, 6:06pm 1592805972

Let me get this straight - you’re saying that there’s more people leaving NZ than coming here, that means less people in NZ needing homes (own or rent). Underdemand.

The article says consents are still higher than last year, so there’s more houses available. Oversupply.

Then we also have to factor in the mass layoffs and business closures come September / October when the wage subisidies and mortgage “holidays” end, which is conveniently around election time.

I think house prices are pointing one way - down.

(ToThePoint will say up)

by Jimbo20 | 22nd Jun 20, 6:18pm 1592806688

There are a number of repatriation flights happening at the moment. The airforce started flying 1000 seasonal workers back to Vanuatu last week, and we are about half way though a series of 8 repatriation flights between India and NZ (about 2000 people going back to India and about the same number leaving India for NZ). The Vanuatua people don't rent or buy houses in NZ and suspect the Indians going back were visitors or temp migrants who don't buy houses either and probably were staying in shared accommodation. It might be quite a while before we have any idea of the NZ population going forward.

I was surprised at the number of non NZ passport holders coming across the border in the last week, Jacinda has been assuring us that we are paying quarantine costs for "Kiwis coming home" but that seems to be a bit of a lie.

by Rob Reid | 22nd Jun 20, 6:44pm 1592808261

The next quarterly employment stats are due for release 5 August - unemployment is likely to swamp these up/down immigration numbers.

by Final Account | 23rd Jun 20, 9:21am 1592860874

Would be good if all the worldly, educated kiwi folk wind up coming back to live in NZ. Can't hurt to have more processing power in this country, by golly we need it at the moment.

by Fritz | 22nd Jun 20, 5:00pm 1592802055

But in all seriousness who will be buying all these new homes?

by dcnbwz | 22nd Jun 20, 7:08pm 1592809707

I will if the price realigns with, say, 6 * median income instead of 9 *. Along with good build quality of course. And yes, first home buyer, in Auckland.

by Rob Reid | 22nd Jun 20, 7:59pm 1592812766

OK - lets see where a house price of 6 x median household income sits in the context of this global house affordability survey thing:
http://www.demographia.com/dhi.pdf

Right...oh here it is right on page 1:
Affordable = 3.0 & Under
Moderately = Unaffordable 3.1 to 4.0
Seriously Unaffordable = 4.1 to 5.0
Severely Unaffordable = 5.1 & Over

OK, so a drop from 9 to 6 takes us from "Severely Unaffordable" to, oh dear, "Severely Unaffordable" (!?).
Sigh.

by dcnbwz | 22nd Jun 20, 8:05pm 1592813128

Yeah I know....it's all the hope I can cling onto. Moderately unaffordable would be bliss!

by RickStrauss | 22nd Jun 20, 8:59pm 1592816342

That would make you feel like a boomer in the tough old days of doing it all on one's own two feet thanks to affordable housing from massive state and private efforts following the war.

by user123 | 23rd Jun 20, 9:57am 1592863051

To be fair, those historical affordability ratios are all based off much higher interest rates. We are not going to see 7% mortgage rates again in our lifetimes. The world is turning Japanese and we are heading for decades of low or zero interest rates.

I'm not saying houses are a buy. Far from it, I think we heading for 20% to 30% declines over the coming 2 years. But we are never getting back to 3.0 ratio for household income vs house price.

by Rob Reid | 23rd Jun 20, 11:53am 1592869981

Yes, fair point. What do you think of a possible scenario where creditors (eg Super Funds) get spooked by a global wave of defaults and either want their money back or a rate that reflects the risk. Would sovereign money printing to "support the market" be able to carry on to cover that without triggering hyper inflation that would pressure rates up anyway?

by GV 27 | 22nd Jun 20, 8:53pm 1592816010

Good build quality? Probably. Usable as a house? Depends. Is a house in West Auckland, with no access to rapid transit, really that usable if it has one car park or less?

by General HubHub | 22nd Jun 20, 7:12pm 1592809947

Kiwis, for shedloads of Aussie money....

by Wrong John | 22nd Jun 20, 5:31pm 1592803882

It's about now that Jacinda will start telling us that she & the CoL govt has solved the housing crisis.

by dcnbwz | 22nd Jun 20, 7:12pm 1592809929

The point of your comment is subtle sarcasm pointing to the fact that the COL govt has done nothing to help the housing crisis. This is true. Given however the other mob encouraged and accelerated said crisis over 9 years while swearing black and blue that there was no housing crisis and that the market would provide means that there is a worse alternative and we are well and truly up the creek.

by The_4th_estate | 23rd Jun 20, 8:54am 1592859289

Its going to be very interesting to see where the construction sector heads over the next 12 months. Am currently reaching the end of a very interupted redevelopment and watching all the subcontractors we deal with, I feel sorry for them, knowing what I saw post gfc. Conversely, if it helps them to actually answer the phone when I call them, perhaps its not such a bad thing to have a little recessionary fear nipping at your heels? We will see...

by mikekirk29 | 23rd Jun 20, 9:04am 1592859875

Please have a look at what Wolf column is saying re USA.
I feel NZ will follow this pattern, but of course not as severe.
As we have much better situation re Covid and unemployment, main effect in NZ will be unlikely to show til August and be moderate price drops and BIG sales drophttps://outlook.live.com/mail/0/inbox/id/AQQkADAwATM0MDAAMS1kNWRmLTIzMD…

by mikekirk29 | 23rd Jun 20, 9:08am 1592860109

Really, we all need to look at more detail: especially of WHAT is being consented and where.
A lot of it is units for retirees, not family houses.
Another crucial variable is demand v supply and for what type of place.
Most commentators continue to hold that there is a shortage of housing/homes in NZ and esp in Auckland.
I disagree and the amount of stock being issued not the market whilst demand (real, buyers) is dropping, is to me a classic sign that prices will fall. Wait til the wage subsidy starts dropping and people want to sell but buyers are insufficient. Then the "conversation" with RE will take place and asking prices and selling prices will drop.

by Ocelot | 23rd Jun 20, 9:25am 1592861141

With an aging population, units for retirees are good across the board, because those retirees will most likely be vacating 3, 4 or even 5 bedroom houses oftentimes. And putting them on the market. That's exactly what I was looking at on the weekend. A 3 bedroom in Auckland South/Central with one owner who'd lived in the house from when it was new 50 years ago and moving into retirement facilities.

by WestieAJ | 23rd Jun 20, 11:27am 1592868469

Well, that owner may have paid 20k? for the house 50 years ago. Now the agent is telling them it's worth 800k and they have made their plans accordingly. But after a while on the market with no bites. Will they be conditioned to drop the price so they can move on with their lives. Heaven forbid they wait too long and it is left to their heirs and successors. They are often less keen to put off their windfall spending until the market recovers.