Auckland's new housing supply still ramping up, could top 20k a year in the next 2-3 years

Property

More than 14,000 new homes a year being built in Auckland and that could increase by a third in the next 2 years

9th Aug 21, 11:56am by Greg Ninness

The number of new homes being added to Auckland's housing supply continues to surge and could increase by another third over the next two years.

The latest figures from Auckland Council show that 1532 new dwellings were completed in the region and received a Code Compliance Certificate (CCC) in June this year.

That was the second highest number in any month of the year since the Council began compiling the figures at the beginning of 2013, only surpassed by the 1581 CCCs issued in November last year.

Those numbers show no sign of slowing down, with 14,421 new dwellings completed in the year to June, up 31% compared to the 12 months to June last year, and up 58% compared to the 12 months to June 2019.

That upward trend is clearly visible in the graph below.

Code Compliance Certificates are issued when a building is completed and ready for occupation, unlike a building consent which is issued before construction starts.

On average in Auckland there is about a two year gap between a consent being issued and a CCC being issued and there is a close relationship between the two numbers when when the figures are offset by two years.

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For example in the year to June 2019, 14,032 new dwelling consents were issued in Auckland, which corresponds reasonably closely with the 14,421 CCCs issued for new dwellings in the year to June 2021.

However in the 12 months to June this year, 19,036 new dwelling consents were issued in Auckland, suggesting that although the number of dwellings being completed in the region is already running hot, it could still increase by around a third over the next couple of years.

If that trend continues, the number of homes being built in Auckland each year could top the 20,000 mark in the next 2-3 years.

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59 Comments

by xingmowang | 9th Aug 21, 12:09pm 1628467751

Most of new ones will be purchased by investors and rented out to potential FHBs.

The government will not enact any policy to actually restrict investor from purchasing.

by flyer | 9th Aug 21, 12:14pm 1628468074

Agree. The government won't touch new builds in terms of tighter restrictions which inadvertently creates demand for off the plan and brand new homes.

by Advisor | 9th Aug 21, 12:17pm 1628468271

Clearly the government has made the decision to keep the construction and allied sectors running hot with ever-increasing price bids from investors and speculators at the expense of FHBs trying to enter the new build market.

by Pragmatist | 9th Aug 21, 3:42pm 1628480557

Good, every new house built is an increase in supply, or for the rare occasions when one was demolished and only one new home built, its still an increase in quality. Both of which we need plenty of.

by Uninterested | 9th Aug 21, 6:03pm 1628489037

In Belmont Auckland there have been something like 80 houses demolished about 3 years ago or lying vacant and trashed. Who knows when these will be replaced and by how many. But right now, when houses are required, there has been this reduction. Brilliant. Not.
I predict that by the time houses are built there, there will be an oversupply.

by patrickb | 10th Aug 21, 10:20pm 1628590848

An increase in quality? With today's builds? I wouldn't be so sure...

by Hans Brink | 9th Aug 21, 2:32pm 1628476329

However you look at it, it is still starting to fill the supply gap. The more homes built whether they become rentals or not is irrelevant. Competition to rent out will bring down rents eventually.

by HeavyG | 9th Aug 21, 1:25pm 1628472323

Only cashed up investors. Negatively geared investors will take a beating with no interest deductibility now in place and a 10 year bright line taking a third of any capital gain.

by flyer | 9th Aug 21, 1:33pm 1628472793

@HeavyG hence my comment about a surge in demand for new builds.

by El Torso | 9th Aug 21, 1:36pm 1628472990

Why would they need to be cashed up? Just equity(ed) up. New builds are exempt from the new interest deductibility rules I believe?

by flyer | 9th Aug 21, 1:37pm 1628473077

Yep!

New builds are the way to go for investors now.

by Lanthanide | 9th Aug 21, 4:47pm 1628484476

Yes, so having them actually use their equity to add to housing supply is good.

by Bluekiwi Prope… | 10th Aug 21, 8:53am 1628542423

Why would they, we live in a free country. This is not Russia or China or North Korea we live in buddy.

by Advisor | 9th Aug 21, 12:14pm 1628468081

in the 12 months to June this year, 19,036 new dwelling consents were issued in Auckland

Multi-unit dwellings made up nearly two-thirds of these consents.

by Uninterested | 9th Aug 21, 12:26pm 1628468784

I think that I could climb from one handrail to the neighbours'. So if their door was open, I could be in there having a good look around...

by CourtJester | 9th Aug 21, 1:21pm 1628472109

Your point? You could do that right now, many people still don't lock their doors. Also, you could punch someone in the face. There's nothing stopping you except your conscience and fear of consequences.

by Noncents | 9th Aug 21, 3:04pm 1628478279

Conscience ain't what it used to be, and consequences are non-existent in NZ for most things.

So what is actually stopping us these days?

by Pragmatist | 9th Aug 21, 3:44pm 1628480641

So why didn't you punch the last stranger you saw in the face then?

by Noncents | 9th Aug 21, 4:26pm 1628483160

Who said I didn't?

by Pragmatist | 9th Aug 21, 4:44pm 1628484276

Well, if you're posting from the cells, I'll make a point of never touching your phone..

by HeavyG | 9th Aug 21, 1:21pm 1628472115

People can do a lot of things if they aren't raised right.

by Let me be Frank | 9th Aug 21, 12:28pm 1628468925

2 years from consent to CCC....and we wonder about productivity.

by Pragmatist | 9th Aug 21, 3:45pm 1628480708

So probably 2.5 to 3 years from first attempt at getting a consent to CCC. :)

by Brock Landers | 9th Aug 21, 12:51pm 1628470310

We will have million dollar slum-boxes as far as the eye can see and prices still won't come down.

Eventually it might click that it's not so much a supply problem. It's a corruption problem.

by Carlos67 | 9th Aug 21, 1:12pm 1628471550

Unfortunately if the picture in this article is what you call a "House" then we are in deep trouble and have learned nothing over the last few decades. These really do turn into slum-boxes in record time as many of them end up being rentals full of unsavory neighbors where yo can hear every party and argument going on.

by Lord Dowding | 9th Aug 21, 1:19pm 1628471944

Not if you own the block as many people seem now to be subdividing and building to rent.

by To the pint | 9th Aug 21, 1:20pm 1628472057

I rented a house almost exactly like the one in the picture about 10 years ago. The neighbours computer games kept me awake and there was no way to keep the place warm. They are a temporary solution at best. No doubt they will be going for $750k each and will be snapped up by the crazies out there.

by Brock Landers | 9th Aug 21, 1:51pm 1628473906

Hahha $750k

More like a million plus in Auckland now. It's a clown show.

by CourtJester | 9th Aug 21, 1:59pm 1628474355

Yup, in some areas (East Coast Bays, Orakei, Remuera etc.) you're lucky to get a 1br under $900k. 2br starts around $1.1M. Penthouse $4M+, as ridiculous as that sounds.

by CourtJester | 9th Aug 21, 1:33pm 1628472822

Funny thing is, European builders have sorted out this problem a hundred or so years ago. I've lived in many apartments in Europe (some built before WW2) and they were quiet. Never had issues with the neighbours as I simply couldn't hear them apart from the occasional walking around in high heels at midnight from one particular woman who lived above. A slight annoyance for a minute maybe twice a month.

by El Torso | 9th Aug 21, 1:38pm 1628473092

Whatever, we drove the neighbours crazy with hard house being played at all hours in our terraced house in London in the late 90s.......

by HouseMouse | 9th Aug 21, 6:02pm 1628488940

I live in a terrace house built a couple of years ago, very warm in winter and never hear a peep from neighbours.

by CapitalNone | 9th Aug 21, 1:45pm 1628473514

We are getting closer to the day we go full Irish - and we have rows of empty slum-boxes awaiting to be demolished.

by Crazy Horse | 9th Aug 21, 4:20pm 1628482807

Nah mate ....never happen here in little ol' far away NZ ...they will just fill them up with immigrants on low wages and top up their overpriced rents with the accommodation supplement .....what a clusterf**k !

by CWBW | 9th Aug 21, 1:23pm 1628472193

I think it's a good time to expand the portfolio during this time of uncertainty- if you have conviction on the outcome.

Labour will eventually come begging- the emperor has no clothes.

It's a matter of time.

https://ibb.co/xffJSnV

by flyer | 9th Aug 21, 1:36pm 1628472985

@CWBW, interesting graph. It basically shoes the Auckland house price is independent to the number of CCCs issued.

Time to snap up more property!

by CWBW | 9th Aug 21, 1:40pm 1628473258

The real money is in the great divergence between CCC and those on the housing register.

The wider the gap, the better it is for service providers- and of course, house prices.

by Cheetahlegs66 | 9th Aug 21, 1:27pm 1628472478

When terraced housing becomes the norm, you'll see the end of the kiwi dream (if it hasn't already arrived). the ability to have 1/4 acre, kids playing in the yard and some vegetables growing. Something went wrong, and I'm picking it was unfettered immigration from early 2000's. As an immigrant myself I'm incredibly blessed to live in NZ but think the good days are irretrievably lost.

by CourtJester | 9th Aug 21, 1:35pm 1628472940

TBH as an immigrant myself I'd be OK with terraced housing - if it wasn't so sh** quality in NZ. Here I can hear my neighbour breathing. In Europe I never had issues with noise.

by Crazy Horse | 9th Aug 21, 2:31pm 1628476296

yep CJ ....driving past this new terraced housing and can see another round of "leaky buildings" coming up.....let alone how long the cheap, bulk bought fittings/fixtures will last ? .....then many have no carparks.

Slum city coming up ....but the greedy PI's will jump at these ......and yet the taxpayer will be footing the bill .....again !!!

by realterms | 9th Aug 21, 2:33pm 1628476398

There's a lot of new terraced housing near us in the east coast bays. 1x old full section to ~4 new terraces, or more. Doesn't appeal to me, but I hope they're not as badly built as the leaky homes debacle.

My understanding is that the council requires car parks, but perhaps that depends on where you are.

by brisket | 9th Aug 21, 3:16pm 1628478976

Units are still being built without soffits. A bit of that sideways rain that we get a few times a year and there'll be plenty of moisture dripping down from the roofline.
Why? Who the hell knows. We have a punishingly specific building code that somehow still allows a lot of idiocy.

by Hans Brink | 9th Aug 21, 2:40pm 1628476815

I do agree with you CJ quality is an issue with NZ builds. Most of my family is in Sweden and if you close the window of your apartment it is silent.

by Cheetahlegs66 | 9th Aug 21, 3:23pm 1628479386

Agree. Like a lot of readers I have been fortunate to spend (months+) in the following countries; UK, Switzerland, Belgium, Argentina and somewhat less in Italy and France. NZ's standard of house construction is the worst by far. It is an embarrassment. And ridiculously expensive.

by Pragmatist | 9th Aug 21, 3:49pm 1628480988

the 1/4acre dream died a decade or more ago, its been the 1/8th acre dream for at least that long in major centres.

by HouseMouse | 9th Aug 21, 3:54pm 1628481265

There could easily be an economic 'shock' in the next couple of years that stops the development frenzy dead in it's tracks.

by Crazy Horse | 9th Aug 21, 4:10pm 1628482206

HouseMouse .........don't say that round here ! ....you will be accused of being a "doom & gloom merchant" or "DGM" .....we are New Zealand ! and we are totally immune from ANY and ALL economic shocks from overseas :) .....now put your head back in the sand and go back to watching that next series of "The Block" !

by HouseMouse | 9th Aug 21, 4:44pm 1628484297

Hahaha
Every boom has a bust, and I have seen it several times in my life.

by Crazy Horse | 9th Aug 21, 5:42pm 1628487722

That's the problem HouseMouse, we are dealing with a large section of the market here in NZ, who have lived here in NZ all their lives and have never seen a decent correction, let alone a housing crash.....while being "manipulated" by a Govt with it's no capital gains tax policy, accommodation "top ups" for rents, the lowest interest rates in living memory, a flood of people arriving in recent years who need somewhere to live........all leading to FOMO .....while all along being "championed on" by the RE lobby and the media etc

What a mess !!!

by HouseMouse | 9th Aug 21, 6:24pm 1628490243

I should clarify that when I talk of 'boom and bust', I am talking of housing development rather than house prices. We have had had several significant house building busts since the 1970s.

by HouseMouse | 9th Aug 21, 3:56pm 1628481395

I have heard anecdotally that Kainga Ora are buying up lots of new private market housing. If so, good for addressing the social housing backlog but will eat in to addressing the private market imbalances.

by flyer | 9th Aug 21, 7:03pm 1628492592

Isn't that funny how Labour is adding fuel to the fire.

All good buying to build more housing for those who need it but why pay 200k or more than asking price as per recent reports?

by WellingtonInvestor | 9th Aug 21, 4:06pm 1628481974

A two year gap on average between a consent and CCC sounds massive. Why are they so slow at building?

How many of these houses being built are rentals? WE need more owner occupied houses. Rentals are often creating passive income for the wealthy to get richer. Rent is dead money.

by Pragmatist | 9th Aug 21, 4:47pm 1628484461

A house is a house, if we ever get to an rental oversupply situation some of those tenantless rentals get sold and convert to OO houses if there is still demand for OO houses.

by unaha-closp | 9th Aug 21, 4:38pm 1628483896

2 years is about right, Auckland increased available land supply in 2017 by more than 50% and by 2019 dwellings completed were kicked into overdrive.

by waymad | 9th Aug 21, 5:12pm 1628485971

Just as we rilly need quote marks around Chinese "data", we rilly need them around Awkland "houses". And last time I took notice, 'new build' has yet to be defined to the satisfaction of IRD ....

by Just a Plumber. | 9th Aug 21, 6:35pm 1628490956

Construction of homes is taking way longer due to materials delay and tradesman to actually BUILD these homes. Anyone can “Bark” on about CCC and average times of completion to appease the” feel good” need, but it is rubbish talk That’s “coal face” fact. If you are building, expect delays and cost increases.

by AndrewRiddell5886 | 9th Aug 21, 6:46pm 1628491572

Delays like get a building consent for re-piling and renovation of a late 1920s cottage, foundation inspection before pouring concrete around piles, building inspector puts a holding work until a geo-tech report is obtained, a month and bit later geo-tech report says need specific engineered foundations (not the foundations for which the building consent was issued), so more delays and more money. And so it goes.

by Let me be Frank | 9th Aug 21, 7:20pm 1628493633

"For example in the year to June 2019, 14,032 new dwelling consents were issued in Auckland, which corresponds reasonably closely with the 14,421 CCCs issued for new dwellings in the year to June 2021."

New dwellings.....and delays in obtaining consent are (in the main ) excluded, though there may be instances of such. 2 years is the average, there will be more delayed examples (and more expeditious examples)....that compares poorly with the past decades, extremely poorly.