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Building consents for new houses, excluding apartments, shot up 10.7% in December, according to Statistics New Zealand

Property
Building consents for new houses, excluding apartments, shot up 10.7% in December, according to Statistics New Zealand
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Approvals to build new houses - excluding apartments -  shot up by 10.7%  on a seasonally adjusted basis in December, according to Statistics New Zealand.

Nationally, last year saw the highest number of new dwellings approved since 2007.

The total number consented last year was 21,300, which was an increase of 26% from 2012.

Stats NZ said there were approvals for 1562 non-apartment dwellings in December, which were "higher than usual numbers" for a December month.

There were 473 apartments, including 122 retirement village units approved.

This gave a total number of approvals of 2035 in the month. On a seasonally adjusted basis the figures including apartments, which can be volatile, were up 7.6%.

This followed a total increase in November, including a very high number of apartment approvals, mostly in Auckland, of 12%.

The latest figures suggest that the house building market is now gaining real momentum after appearing to stall somewhat toward the end of the year.

Westpac senior economist Michael Gordon said the construction sector ended 2013 "on a high note", with residential building consents much stronger than expected in December.

"The Canterbury rebuild continues to dominate the totals, but the re-emergence of the Auckland apartment market is a notable recent trend," he said. 

The November increase had been driven entirely by apartment units (rising to 492, the biggest month in nearly six years), he noted.

"This component is very volatile and we had expected the spike to reverse. Instead, they held up at that level, with 473 consents in December. It's clear that the trend in apartment consents has strengthened over the past year, to the extent that it forms a meaningful part of the story of how the construction sector is tracking."

This is especially true in Auckland, where apartment consents have been very strong recently, whereas ex-apartment consents have fallen almost 20% in the last six months.

"We've raised concerns that the supply of new dwellings in Auckland may be stalling, despite the obvious incentives to build; but it may be that the composition of what's being built is evolving away from standalone houses towards apartment units," Gordon said.

Housing Minister Nick Smith said the building consent figures for 2013 were "promising figures", which confirmed that the Government’s policies to increase housing supply were "delivering results".

"Auckland is where housing supply is under the most pressure. The Auckland Housing Accord signed in October sets a target of 9000 new houses consented in its first year. It is encouraging to see 1959 consents or 22% of this target achieved in the first quarter with the October, November and December months. This is up an impressive 53% on the 1297 consents issued in the same three-month period the previous year."

Smith said there was a lag period between the designation of the first batches of Special Housing Areas established late last year and when these fast-track consents will start appearing in building consent data.

"I expect these to start trickling through this year and momentum to continue as more Special Housing Areas are announced."

In Christchurch, as the earthquake rebuild "gains momentum", building consents in Christchurch at 2542 for the 2013 year are at their highest level in six years.

"This will help to return Christchurch’s housing stock to pre-earthquake levels and ease pressure on its rental and temporary accommodation markets," Smith said.

Nationally the building figures are slowly recovering from very low levels following the bursting of the mid-2000s housing bubble and the impact of the global financial crisis.

Nine of the 16 regions consented more new dwellings in 2013 than in 2012.

Including apartments, the regions with the largest increases were:

  • Auckland – up 1727 (38%) to 6309 (the city's biggest figure since 2006)
  • Canterbury – up 1725 (43%) to 5762
  • Waikato – up 441 (24%) to 2245
  • Wellington – up 338 (27%) to 1573
  • Bay of Plenty – up 205 (21% ) to 1200.

Statistics New Zealand said the annual number had been rising since 2011, when 13,662 new dwellings were consented – which was the fewest since the series began in 1966.

High points in the series include: 31,423 new dwellings in 2004 (a 30-year high) and 39,766 new dwellings in 1973 (the series maximum).

Building consents - residential

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3 Comments

Great news, BUT.. Consenting is one thing, building an altogether different thing. There is already a lack of contractors available to price work letalone build it. What is going to happen in 6-12 months and beyond? Who is going to do the building? Serious questions.  

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Let's hope the RBs strategy is gaining traction. So far so good with prices of existing homes beginning to slow and building starting to pick up.

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Perhaps this is a clear signal that Auckland house prices will slow down or even drop below the 2007 peak?  A good news for the first home buyers!!

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