The number of new dwelling consents issued has trended down every month since August last year

The number of new dwelling consents issued has trended down every month since August last year

The supply of new homes continues to fall well short of the number required with the trend on new residential building consents falling in February for the seventh consecutive month.

Statistics NZ said consents were issued for 2418 new dwellings in February, barely changed from the 2379 issued in February last year.

Statistics NZ's trend series, which removes seasonal fluctuations, shows consent numbers have declined on a month-by-month basis in every month since August last year, which is mirrored in the major centres of Auckland, Waikato, Wellington and Canterbury.

This paints a picture of rising consent numbers in the first half of the 12 months since February last year, only to have them fall away again in the second half, leaving consents numbers largely back were they were a year ago.

In Auckland, where the housing shortage is the most acute due to the region's high, migration-fuelled population growth, just 800 new dwelling consents were issued in February, almost unchanged from the 787 that were issued in February last year and well below the estimated 1250 new homes it's estimated are needed to be added to Auckland's housing stock each month just to keep pace with population growth.

That target was not reached in any single month over the last year. The nearest month was November when 1188 new consents were issued in Auckland.

In the 12 months to February consents were issued for just 10,045 new homes in Auckland, while it's estimated that at least 15,000 would have been required to keep pace with population growth, which means Auckland's housing shortage has worsened by about 5000 homes over the last year.

In the Waikato 294 new dwelling consents were issued in February compared to 274 in February last year, in the Bay of Plenty 226 were issued compared to 274 a year earlier.

In the Wellington region just 133 new dwelling consents were issued in February compared to 113 in February last year.

That means the number of consents issued in the Wellington region was barely above Northland where 131 consents were issued in February.

In Canterbury there was a substantial fall, with 361 new consents issued in February compared to 525 in February last year (the interactive chart below shows the number of consents issued in each region on a month by month basis).

The total value of new dwelling consents issued in February was $912 million, down 1.5% compared to $926 million in February last year.

On the commercial property front, consents were issued for 189,000 square metres of non-residential buildings in February, down 12.9% compared to February last year, while the value of that work ($410 million) was up 10.3% compared to a year earlier.

Building consents - residential

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Would it be realistic to suggest those November consents in Auckland will be hitting the market about now as finished builds?

Nope.
Firstly, not all of those consented will be built.
Secondly, if they are built many will be apartments which are probably still 6-8 months away.
Some houses consented in November may be 2-3 months away.

I have often wondered why the consents issued is the benchmark stat rather than consents signed off is not.?
Also just what the difference between the 2 would indicate?

16
up

You know it's bad when the pic attached to the article is not of a NZ house either !
The upper siding is wavy shingle North American style
& the window joinery a North American double glazed window.
Roger Douglas dumped a perfectly good apprenticeship system to save a buck for the government short term which ultimately lead to leaky homes through his de regulation and silly inept BRANZ who would pass anything a big building supplier would seek approval for.
I'm not going to tell anyone here who one of the biggest culprit manufacturers was in leaky homes but I will tell you where I live now their products are banned !
Now when NZ needs houses built they must import trades people from Ireland & Phillipines etc along with the ever changing faces of Chinese coming in on their JKey open visas for a couple of years back & forth
What sort of government runs a country like that ?
Incompetent Government

yeah hopeless.

Well if the case was proven against this manufacturer, then you should tell us. Why keep the information to yourself?

21
up

Why keep framing the population oversupply as a housing shortage?

Because it's the National government's only economic plan. There is no Plan B.

Because the rate of construction of houses in Auckland is 1/3 as fast as a normal city?

Because to avoid a population oversupply when a large city is building as slow as Auckland means a 1 child policy and a wall?

Why would builders build when the latest auction sales show that there is a struggle to shift houses?
The latest figures suggest that 50-60% of auctions fail to meet the reserve or have no bid at all.
Developers are well aware of this trend so are starting to hold back rather than building into a falling market.

In reality the prices are well above the cost of building. If margins get tight the land price should fall to make building viable again. I think the people land banking on the expectation of rising prices will see the value of their land static at best - and therefore expensive to hold. I would love to see landbankers taking a bath on this.

What is critical is that the government doesn't move to reduce supply because the market turns. This is a common response in other markets - where developers complain and resource consents become more difficult.

A fall in housing prices may finally shake NZer's belief that property is the only investment, which in turn may result in more investment in productive industries

Yes we need a crash. Short term pain, long term gain.
But Tony Alexander says prices won't go down, so they won't

12
up

Seriously, how bad to things need to get? Time to put a lid on immigration.

Immigration isn't really the issue.
Most 'immigrants' are here short term, and cramming into flats and hostels.
The much bigger issue is the incentives for property speculation, for both kiwis and off shore parties

So, we're going to keep on jamming more people in, but not get out of our own way long enough to get anything built, anywhere, and just sit around wringing our hands in total bewilderment. FFS. How is NZ this effing useless? Give ourselves a special medal for building companies losing money and going out of business in the middle of a housing shortage.

I would like to gather Nick Smith, the rest of government, various councils, building industry and planners, and bang their stupid heads together until they either get something done or die.

Good we finally might get tradesmen to quote and do reno work for reasonable price with in a good time frame.. if only the building products suppliers started hurting and dropped the stupidly high pricing as well. perfect storm.. purely one eyed of course..

I was in Qtown yesterday. My taxi driver was going on and on about booming property prices down there.
He looked really shocked when I told him Auckland median prices were down about 10%. It was a look of 'no, that could never happen'
Maybe he knows if Auckland catches a cold places like Qtown might catch the flu?

12
up

When your taxi driver gives investment advice it's peak bubble territory.

that reminds me of the story,probably apocryphal,about Rothschild being offered investment tips by the shoeshine boy just before the 1929 Crash and deciding it was time to sell.

His face dropped and he went silent for about a minute after I had told him of the Auckland drop away.

It's not all about Auckland Fritz. Queenstown and the Wakatipu basin are pretty much in their own planet, not that well connected to New Zealand. Lots of strange drivers there, much of which is international.

Actually I think Queenstown is very similar to Auckland, higher highs and lower lows. They will get smashed I reckon.

Not apocryphal linklater; a true story but it was Joe Kennedy, not Rothschild.

We have being trying to build a house for a while now. The problem is not with the cost of land or the Council, it is the incompetence of architects and the deals they have with their preferred "builder of choice" scamming the general public and hiking costs. That is why consents are falling.

The government says that the housing issue is a supply side problem despite ample evidence suggesting otherwise. It has failed in all attempts to ramp up supply but are unwilling to do anything to reduce excessive demand pressures from investors and immigrants.

I do think supply has been a big issue, but demand side has been just as big.
However, the supply narrative clearly suits the govt better. They can make policy changes designed to boost supply, knowing full well that not much gains will be made because of the fundamental capacity constraints in NZ.
This makes it appear that they are doing meaningful things, when really they are just tinkering.
And it suits their constituents to a tee. Construction gets bolstered, and prices keep going up (until recently, at least)

In the last 7 years Auckland land prices have 200% soared higher than a comparable city, because Len Brown and Phil Goff (elected by Aucklanders) banned development on 90% of the land surrounding Auckland. This is a huge problem and has completely screwed over Auckland's ability to grow. And will eventually lead to Auckland prices plummeting.

Meanwhile Auckland has added population at a rate minutely faster than comparable cities, making no real difference to the ability to build in line with population increase.

So obviously Aucklanders blame foreigners or the government or banks or something. Couldn't possibly be their own fault.

In fairness, continually adding more people while those problems exist is a terrible idea.

NZ has higher immigration rates than other OECD countries and now has a full 25% of residents having been born overseas. Yet somehow National can't grasp this could have anything to do with the housing crisis.

B&T auction room success rate 12%, 3 out of 25

it's going down baby

This is for today only, right?

yes.. the Kelston, glen eden and Henderson heights properties sold..

As I said on this website about 3 weeks ago, west and south is getting hammered. I'm hearing down about 15% on average in these areas

Compared to how many private treaty deals done? Clearly auctions are not the way to sell right now but there are more ways to skin a cat...

Year on year no change. Hardly the crisis deepening. AnywayTime for change.

Labour to ban foreign residents foth local and offshore buyers buying exiating properties to encourage them to buy NEW BUILDS.

Slap 15% stamp duty on investors buying existing properties to encourage them to buy new builds.

Please do not make it harder for NZ'ers to build new, this would increase the costs for a new build , which are already exorbitant. Just put a reasonable limit on immigration as far as I can understand under intentational law because we signed a treaty, NZ is not able to differentiate between NZ'ers and offshore people so the only choice is to limit immigration

Hard to find any investment to build in Auckland during a falling market.

Nobody is going to buy a new house because the cost of the build and section is too expensive and if as a previous article is correct and capital gain is falling why would you.

Well here's the kicker ............... the cost of labour has skyrocketed so high that developers are gun-shy.

And quite frankly I dont blame them , because the building rate per m2 in Auckland is way over the costs in a place like Sydney .

There is simply no justification for this situation when we have an open labour market and open door immigration policy which should keep wages in check .

They HAVE been kept in check which is why we have an average house costing 10 times the average income, probably in reality, more

'There is simply no justification for this situation when we have an open labour market and open door immigration policy which should keep wages in check .'

Exactly, but it's because your making a completely unfounded claim.
1. Although wages in a way reflect the cost of living
2. wage infaltion is not high http://www.stats.govt.nz/tools_and_services/newsletters/price-index-news...
3. According to NZIER 2011, labour in New Zealand is cheaper than in Ausralia. But it takes us more hours to complete the same work. Interesting....

https://nzier.org.nz/static/media/filer_public/6e/73/6e73e3ad-7973-42ed-...

Just scrapped a build project a week ago because the cost of Reports, utilities & consents before even looking athe the price of the build was about 80% of the price of the build! Not many people would want to build in a cooling market anyway.

Architects charge 10% of the cost of the build for paper architecture that can't actually be built, then insists one uses their 'best friend' as a builder because that particular builder 'understands how they work', if one doesn't comply they simply ramp up their fees when it comes to overseeing the project.

Attended an auction yesterday in Hamilton. 6 of the 13 houses on offer sold, Nearly every house that sold went something like this:

Auctioneer opened mid - low, 1 bidder vs vendor bids. Bidder gets sick of being dragged up, hand stays in pocket. Auctioneers wingmen swoop in, friendly little chit chat, bidder indicates to talk outside. Auction paused. Wait minutes. Back in with an agreed price, bidder raises hand, house sold.

They got through 6 or 7 properties in just over an hour. Tedious

Just out of interest, why does anyone bid against vendor bids?

I was just wondering the same thing. It seems to me if you are the only bidder you have quite an advantage. The only reason to bid would be if you really, really wanted the property. Mind you a serious bidder has probably worked out his maximum price already. A relative of mine sold a house like this, just one bidder. When the bidding stopped the buyer just asked how much they wanted and happily paid what they asked. It turned out he got it for a really good price too.

Because they're stupid. That and they listen to the agents goading them into doing so.

Why are people still attending auctions when "Negotiation" is clearly back on the table? Auctions are for those desperate sprukers who like to "WIN" and walk away feeling accomplished. The Auckland market is on the downwards decline and the long term investors are no longer interested in buying into an overpriced investment. Let the peasants fight over the crumbs!

Last night i watched HGTV Big Sky house sales.Couldn't believe the prices of houses......CHEAP.
Went on line today to look at whats on offer in Helena....can't believe that they can sell homes for 350/500k with
4/5 bedrooms double garaging 2/3 bathrooms and the quality from here looks pretty good.
I know its Montana but the prices are unbelievable.
We are getting porked good and proper in Kiwiland,.

You can buy reasonably nice homes in Christchurch for under 500k and far better quality of life in NZ.
The U.S. Has got that many problems it isn't funny and been there several times and wouldn't live there if I was paid to.
If you aren't happy with something then do something about it!
Homes are overpriced in price for what you get and quality of life in Auckland we are all aware of that, but if you wish to remain in Auckland then you will just need to grin and bear it, won't you????

Or hope that prices go back to the way they were only a few years ago. Fingers crossed.

I thought you were heading to Queensland? Have you considered Hobart? It kind of looks like how Auckland did in the past.

Totally agree! I vacated Auckland on a whim 18 months ago after living there for 10 years and as much as I loved my city and lifestyle, it was becoming such a drag on me. I started to hate waking up to the drone of early morning traffic chaos starting at 5:30am, even though I was at least 3km's away from the motorway. I got stuck in traffic more times than I care to remember, when I could have been at home with my family and it wasn't this bad when I moved up there in 2008! Not much infrastructure going on and NO Auckland is NOT a first world city, it is just New Zealands largest town and needs to grow up fast!

No credit = no houses = well done RBNZ for this mess, just leave the free market alone

Keywest. You think throwing more cheap money on the fire will fix this?

RBNZ regulates the banking sector, that is a requirement of banking in New Zealand, and I'm glad it is, unregulated banking is pure greed, and will go wrong, see GFC 2008.

RBNZ website: http://www.rbnz.govt.nz/regulation-and-supervision/banks/overview

If only it was a free market then things might have actually worked out, government had all the levers, did nothing. Reserve bank only had a few, and only a very narrow mandate. This is not the reserve banks fault. Just because the government didn't intervene in the market doesn't make it free. In fact making it more free would have been a good intervention.

In fact here's a few things that make it currently not free.
FHB subsidy
RMA, and planning law
Single supplier problems
Working for families (subisdy for landlords)

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