Building consent levels in November reach a 7 year high

Property

Auckland and Canterbury drive a substantial increase in building consents. In fact, many of the approvals concentrated on Auckland isthmus

9th Jan 15, 11:34am by David Chaston

Residential building consents issued in November reached their highest level in more than seven years.

Consents were issued for 1,946 houses and another 474 apartments, giving a total of 2,420 for the month.

This is +6.7% more than for the same month a year earlier.

Of the 474 apartments consented, 95 were for retirement village units.

Auckland was the driver of the high number of apartments with 442 of the 474 national figure.

Of the total consents, more than 70% of them related to Auckland and Canterbury.

In fact, 562 of them related to consents for housing in the old Auckland City. That represents 23% of the national total and 58% of all Auckland region consents.

Canterbury rebuild

Since 4 September 2010, $2.4 billion of Canterbury’s building consents have been identified as earthquake-related. This includes consents for 2,755 new dwellings.

Not all earthquake-related consents can be identified. For comparison, total figures for Canterbury from September 2010 to November 2014 were:

$11.1 billion of building consents
19,640 new dwellings consented.

In November 2014, the value of consents identified as earthquake-related in Canterbury was $70 million (of a total of $340 million for Canterbury).This included:

109 new dwellings (of a total of 726)
$55 million for residential building work (of $247 million)
$15 million for non-residential building work (of $88 million).

Non-residential consents

The value of other non-residential building work consented in November 2014 was $426 million. The regions that contributed the most to this value were:

Auckland – $114 million
Canterbury – $88 million (including $63 million in Christchurch city)
Wellington – $64 million (including $54 million in Wellington city).

The building types with the highest total consent values were:

offices and administration buildings – $155 million
shops, restaurants, and taverns – $61 million
factories and industrial buildings – $50 million.

National summaries

The total value of building work consented in November 2014 was $1.3 billion – $867 million of residential work, and $426 million of non-residential work.

For the year ended November 2014, compared with the year ended November 2013, the value of building consents increased for:

all buildings – up $2.6 billion (+22%) to $14.4 billion
residential buildings – up $1.7 billion (+22%) to $9.4 billion
non-residential buildings – up $0.9 billion (+22) to $5 billion.

Building consents - residential

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Source: Statistics NZ

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28 Comments

by Boatman | 9th Jan 15, 1:29pm 1420763369

Wow , this year -on year growth cannot possibly be sustainable without the whole dynamic changing .

Best take advantage while it lasts , because last it will not .

Build prices are already getting out of hand , some chippies are demanding $50/hr ........thats more than a Doctor earns at Waitamata DHB

The market is already out -of -kilter, recently saw a house for sale in a reasonable area of Brisbane for AU$ 550K. . Same house in Glenfield Auckland would fetch around NZ$800k .

With the two currencies are almost parity , we are becoming too expensive .

by Chairman Moa | 9th Jan 15, 2:01pm 1420765308

Yep, you can build a 4br home with Linea weatherboard style in Brisbane for about 280K (average) or 450K for one with swimming pools, European appliances..

Last year I was looking at a new home in a highly sought after suburb of Brisbane, 4-5km from CBD and top school zone. 820K they were asking for, 5 br with Miele appliances, 6x4 pool, 6KW solar panels, 500 sqm section fully landscaped. What do we get in Auckland?

by Kumbel | 9th Jan 15, 3:21pm 1420770074

What do we get in Auckland?

3/4 of an ex-state house in Grey Lynn. Not much of a comparison is it?

by Chris_J | 9th Jan 15, 7:48pm 1420786119

I recall looking at Brisbane build costs in 1989 and being astounded how cheap they could build for.

From memory it was something under $30 to around $40 a Sq ft in Brisbane versus $55 to $70 in Chch for the equivalent. Even with the exchange rate (75c ish at the time?) Brisbane was still much cheaper.

Nothing has changed except prices have gone up in both places.

by KH | 12th Jan 15, 10:33am 1421012027

Chairman. You could get those Brisbane house prices in Cromwell. New houses from standard to flash at simliar range of prices. While commentators on interest.co often are on a 'different wavelength', plenty of people do get it and house are going up in droves there.

by steven | 12th Jan 15, 11:18am 1421014707

Except there is no well paid (or little) work in Cromwell, and indeed many small other NZ towns. Hence housing is way cheaper.

by Casual Observer | 12th Jan 15, 12:04pm 1421017481

Cromwell is becoming a 'satellite' town for Queenstown, Wanaka and Alexandra employees. The two primary schools are at or near capacity and one has just built two more classrooms. The price of housing is cheaper here than Queenstown or Wanaka and therefore appeals to families and the 40min drive to work (car pooling operates) is a doddle compared to working in some cities.

The most common occupational group in Central Otago District is 'managers', Note: Queenstown and Wanaka are not in Central Otago.

http://www.stats.govt.nz/Census/2013-census/profile-and-summary-reports…

by dtcarter | 12th Jan 15, 12:31pm 1421019065

Apples/Oranges

How do Cromwell prices compare to a Queensland small town that is 'only' a 40 minute drive from another slightly less small town?

by Casual Observer | 12th Jan 15, 1:01pm 1421020889

Not sure how many small towns in Queensland the size of Queenstown have an International airport like Queenstown. That is a drawcard for some businesses here so if you want apples with apples....................

Not everyone wants to live in Central Otago - that is accepted. Then again the 'small town/village' lifestyle is what attracts some people here. http://fairfaxmedia.newspaperdirect.com/epaper/viewer.aspx page 7

dtc you lived here for 10years - why did you come?

by KH | 12th Jan 15, 1:44pm 1421023461

We are talking new builds dt. And price of land. Auckland is the outlier not just in comparison with Brisbane but with other attractive places across Australia and New Zealand.

by steven | 12th Jan 15, 3:17pm 1421029065

service industry ie bar managers? oh yeah that is a really good professional occupation....not.

40mins and petrol is going to go back up in price and maybe even be rationed....yes this sucha great earner/idea.

by Casual Observer | 12th Jan 15, 4:41pm 1421034072

I did point out steven that Queenstown and Wanaka are NOT Central Otago. Not that many bars in

607501 Teviot 607800 Roxburgh 607900 Ranfurly 608000 Maniototo 608100 Naseby 608302 Dunstan 608303 Clyde 608500 Alexandra 608600 Cromwell

which are the areas for Central Otago in the Census data. If you read the link you would have seen the 2nd largest largest group were 'professionals'.

https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0…

If you read the link I put up regarding the 'Crown Rangers' you would have seen that people down here don't have a problem with a 40minute commute. You don't want to live here and see the area rather negatively - that's your opinion and that's fine. Others see it differently.

by KH | 12th Jan 15, 1:39pm 1421023159

We accept you don't want to live there Steven. And you can't work there.

Your personalised view is contradicted by what is actually happening. Lots of people are making money there, they can afford to build new houses. Houses are going up in droves and the population is expanding.

It's time some rethought their idea of Zombie towns. Yes we do have them. In my view some of them are suburbs of Auckland.

by steven | 12th Jan 15, 3:20pm 1421029239

No not so much my personal view as what I see is a limited eco-system of service sector in some areas such as a Queenstown offshoot. Do you really think this can be repeated across NZ? as a robust eco-system that will last? because I certianly do question that.

by cowboy | 10th Jan 15, 2:01pm 1420851665

That's a _lot_ less than a doctor gets earns.

And the doctor carries little person risk, and provides none of his own eqiupment, and has no responsibility for underwriting inventory, and has no "building inspectors" or leaking buildings, and limited duty of care for the subbies...probably doesn't even have to worry about doing their contracts either. Nor does the doctor have to provide scaffolding or material and tools storage. Or get the sign off that the officals and customer are happy with a _completed job. And the doctor can blame most complications on circumstances beyond their control. And many operations are underwritten by the state or by insurers so they can be assured of payment for them and other staff. And other staff problems aren't the doctors' responsibility to discipline. Nor is your doctor going to agree to "50 yr worthiuness clause"...

by Kumbel | 9th Jan 15, 3:24pm 1420770246

Happy New Year, everyone.

Just so we can put the irrational exuberance into perspective. Auckland needed to add 1,087 dwellings in November just to tick over on the targets of the Special Housing Accord. That's not counting making up the shortfall that occurred while AC and the government were chatting amiably over sausage rolls.

The 967 "dwellings" ( includes 442 apartments) is 89% of the target AC had to reach.

Since Auckland Council laid out the basis of the Special Housing Accord 18 months ago and signed it with the government (Nov 2013) , the housing situation in Auckland has only got worse. These figures show that the rate of how bad things are getting is slowing down but we are yet to see an improvement.

If the original Manhattan Project had been run as well as the Special Housing Accord we would still be fighting WWII.

by Houses Overpriced | 9th Jan 15, 5:39pm 1420778389

Hopefully this is the start... there was another anouncement to be announced by NS, lets see what he upto..

by muntijaqi | 12th Jan 15, 8:25am 1421004331

New Zealand is a ripoff in many areas, not only houses.

Coffee in Sydney $3(here $4,50), beer in a bar $4,50 (here $8), capsicum $2/kg (here $2 each!)

I just returned from holidays in Australia where prices are similar to Europe and I am amazed how kiwis are being overcharged in almost anything.

From now on beers and coffees always at home, growing more vegges at home and my wallet closed as much as i can.

by Stephen Hulme | 12th Jan 15, 8:51am 1421005914

Yes. I totally agree. It's a dispiriting anomaly particular to NZ - I hardly venture out since I cannot abide being ripped off, despite enduring rack rate domestic energy bills.

by Stephen L | 12th Jan 15, 9:47am 1421009244

Am not sure you are always correct re Aussie prices; I seem to have paid over $4 for coffee in Melbourne, and certainly more than $6-$7 for a beer. Nevertheless the prices here are expensive, and I believe reflect at least two things: our exchange rate should not be near parity with Aussie based on fundamentals, and property being the prime investment channel here means a good portion of our coffee and beer prices are paying exhorbitant rents. I don't believe many cafes and bars are making huge profits, although many of their landlords will be doing okay. As a disclosure I part own a cafe and separately a restaurant/wine bar. Neither really make a profit frankly, although have the high prices you mention. We have as it happens not increased prices in the five years I've been involved, and in fact have brought the food price levels down. Each facility pays what seems high rent.

Separately am aware of the economics of the bar at my sports club, where beers are available for $4.50. The club owns the facility, and chooses not to charge itself rent.

I understand you will still vote with your wallet, and fair enough. Over time enough of that happening, and the exchange rate will eventually come down, and commercial rents will also decline.

by KH | 12th Jan 15, 10:18am 1421011121

Good Comment Stephen L.

As I see it we have a superb high skil smal business sector. Which operates to market.

But they are extorted by big monopolies, in cohort with government, who crush small business, and the end loser is the consumer. Energy, (electricity and fuel) banking, also airports, are able to extract extortionate prices and you can't get past them. Communications. Local authorities of course and a lot of the government services including health. These do not operate to market forces. They can control their incomes to a large extent, and they don't decide to go easy on us.

Time we ran this country for the benefit of the citizens.

by Stephen Hulme | 12th Jan 15, 10:19am 1421011177

Hmmm.

Foreign direct investment (ownership of companies) in New Zealand increased from $9.7 billion in March 1989 to $101.4 billion at March 2013 – ten and a half times. As a proportion of the total output of the economy, Gross Domestic Product, it has risen from 14% to 48%. Though ownership of overseas assets by New Zealanders has grown even faster over that period from a very small start, net foreign direct investment has still almost tripled as a percentage of GDP, rising from 13% of GDP to 37%.

Another $7.2 billion left New Zealand in the year to March 2013 made up of investment income from debt and smaller shareholdings (portfolio investment), making a total $15.5 billion. That is almost as much as the $15.8 billion of dairy and forest product exports during the same year. Almost half of the $15.5 billion (45%) was from the banking sector. The investment income from the banking sector (after taking account of its small earnings from abroad) was responsible for 71% of New Zealand’s current account deficit in the year to March 2013. The investment income deficit (income on New Zealand investment overseas less income on foreign investment in New Zealand) is typically at least as great as the current account deficit which further increases New Zealand’s foreign liabilities. Read more

by Stephen L | 12th Jan 15, 11:31am 1421015497

Stephen, thanks. No surprises at all, but good to see the figures. It is an area where in my view the population could be better informed. For example the case for selling the power companies offshore was not well made at all (because there was not a good reason to do so that I can see) but there was very little media analysis that I saw that connected the dots to the current account and our long term loss of national wealth.

by Henry_Tull | 12th Jan 15, 10:54am 1421013271

a good portion of our coffee and beer prices are paying exhorbitant rents

- if it were only the rent

if the cafe resides within a modern retail complex, often they are subject to strict coffee sale price/promotion guidelines (ever wondered why coffe is never "discounted" by XX%).

and this over a above a set of franchise rules

by dtcarter | 12th Jan 15, 12:26pm 1421018816

by waymad | 12th Jan 15, 12:49pm 1421020170

Happy new year to y'all.

If'n yez fiddle and faddle with the hyperactive graphy doo-dads above, ye will see that the all-time consent monthly peak was over a decade ago, at 3513 if my eyes do not deceive,

Which, set agin 2420 for the latest month's stats, is near enough to 1 1/2 times the consenting rate.

And given that ya needs 'consent' (and an LBP) for a whole lotta stuff not needed a decade or two back (like updating a window (weathertightness), widening an internal door (structure), walling in a verandah (foundation, structure, weathertightness) and I could go on and on and on but yez may catch my drift by now), it is not impossible that higher consent volumes may be as much down to definitional changes as actual 'building'.

Hey ho. What cannot go on forever, won't.

by Kumbel | 12th Jan 15, 4:27pm 1421033226

Panic ye not, good waymad.

The efficient chaps and chapesses at Statistics NZ separate out consents for dwellings and consents for alterations and domestic outbuildings.

It's apples for apples and still awful.

BTW did you catch this pearl in today's Press. The answer to congested roads apparently is forcing people to live in overpriced rat cages in the non-existent centre of CHC so we can all walk and cycle. Or you could just improve the roads.

by waymad | 13th Jan 15, 12:52pm 1421106771

HNY, Kumbel.

Good to see SNZ are keeping their data pure and comparable.

As to road congestion, there are four more solutions not to be met with in official minds (which are notoriously shallow at the best of times) - all stem directly from an appreciation of queuing theory.

reduce size of vehicles (thus stacking more into same road space): the halfling car, motorcycles, scooters, etc. I personally scooter to work - can use footbridges, dodge road cones (many lanes are blanked off for weeks for no apparent reason), and all this for around $5 Gaia Juice per week.
Shift commute times: roads clogged at 0630 are often flowing freely at 0930
Harmonise classes of traffic speeds e.g. no mo' 90km/h for trucks (most linehaul rigs are capable of sustained 120 km/hr)
Research entraining of suitably equipped vehicles - this allows separations to be drastically reduced. Won't happen before electric driverless rigs are common - humans are not capable of doing this sustainably - but the point of Research is to look ahead....where with the Singularity coming, time will open up new opportunities.