The residential building industry is on the up in Christchurch, according to the April building consent data from the three Councils in the urban area.
Canterbury is one region that has been in a building boom for the past 12 months. Although activity is still off the peak of the earthquake rebuild numbers, in April the number of building consents across the Region topped 500 for the second month in a row.
Data supplied by Blackburn Management shows sharply rising levels even as we go into the winter months.
| April ... | Christchurch | Selwyn | Waimakariri | Greater Christchurch |
| dwellings | # | # | # | $ |
| 2018 | 149 | 86 | 57 | 292 |
| 2019 | 173 | 99 | 38 | 310 |
| 2020 | 201 | 101 | 47 | 349 |
| 2021 | 305 | 154 | 66 | 525 |
This is a +50% jump in dwellings consented from the same month in 2020, a level that didn't seem to have a COVID impact.
The value of these upcoming residential projects is reflecting an even greater jump.
| April ... | Christchurch | Selwyn | Waimakariri | Greater Christchurch |
| value | $ mln | $ mln | $ mln | $ mln |
| 2018 | 52.9 | 35.4 | 18.1 | 106.4 |
| 2019 | 57.0 | 38.4 | 14.1 | 109.4 |
| 2020 | 62.4 | 36.7 | 15.5 | 114.5 |
| 2021 | 93.2 | 59.6 | 22.5 | 175.3 |
This is a +53% jump from the same month in 2020.
Christchurch City is generating about 60% of the region's consents, and a similar level to three years ago. The big expansions in the Selwyn District reflect single family houses. Those in Christchurch are in multi-unit developments.
The rise and rise of new residential consents ensures that more dwellings will be built over the next two years. It is expensive to get as far as the consenting stage and builders are reluctant to waste that investment, and this ensures most if not all this surge will come to market.
But in Christchurch and well as nationally, there are emerging concerns this building activity may face soft demand when it is completed and ready for sale. The revisions to border and immigration policies threatens the longer-term prospects for house builders just at a time public policy makers are calling for more activity, and material costs, including lumber, are rising sharply. Soft demand and high costs can kill this industry quickly, and if a downturn does come, it will be just another yaw of stop-go that it has suffered over the decades. Only a steady long-term commitment from HNZ./ Kainga Ora can prevent that.
Statistics NZ will release the national building consent data on Tuesday, June 1, 2021.
Update: The tables have been adjusted to reflect the number of dwellings consented, rather than just the number of consents used in the original version
9 Comments
lol Did you see our 'Town Hall' General Election Debate? Housing isn't perfect here, but we try to have some standards. The City Council don't want a bunch of our feral business leaders and residents outside their offices with proverbial (I hope) pitchforks.
Prices have been increasing here though.
"But in Christchurch and well as nationally, there are emerging concerns this building activity may face soft demand when it is completed and ready for sale."
Wouldn't softening prices increase demand? I understand galloping prices creates FOMO which builds on itself but flat or slightly declining isn't too bad, especially when it comes from an increase in builds.
Older, Standalone Homes have increased significantly in the past year. With new developments in the works and many already coming online; there might be a glut of older homes.. particularly earthquake shaken properties - pay a little more and you could pick up something brand-new.
Eventually parts of our vast 'red zoned land' will open up for development. Plots of land seem pricey in Christchurch, considering how much land could be made available.
It only takes 30minutes TOPS to get into town from most outer suburbs [I am an effective driver for sure] so it's not important to live in the Central City. Plenty of Malls, Hubs, Local Shops, Dairies, etc around the suburbs. Hopefully some more Millennials around my age move here. Christchurch would make for an awesome Silicon Valley.
A city rises. Perhaps to be renamed Phoenix? But seriously this is positive news given the catastrophes, EQs, wildfire & terrorist. A clear signal of resilience and potential. The people are backing the city. Let’s just hope then the Christchurch City Council will back the people and have finally got a grip on the fact that basic services and infrastructure have been widely neglected for vainglorious and selective projects that are the complete opposite. Christchurch, its people, very much need this substantially redressed instead of the wastrel expenditure pushing and compounding rates beyond too many households’ budgets.
Going on how quickly these types of developments tend to sell out it would seem that people in CHCH are prepared to move into them. Section sizes are obviously becoming smaller in the new developments on the outskirts of town too - it's signaling that people are prepared to move away from the larger, harder to maintain, sections in preference for newer housing with less space. Removing old housing stock to make way for density really is what a city should be doing to help contain urban sprawl. By land area, Christchurch is huge.
I think they are being sold to investors, particularly those from outside of Christchurch as they seem "cheap" to Auckland investors. Whether anyone wants to move into them remains to be seen, the buyers wont find out until its too late and they've paid for the place. The yields on them are pretty low, something that you pay $750k for might only rent for $500 a week. That's a 3.5% gross yield, and you havent paid rates/insurance/bodycorp/tax yet.
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