Building consents rise in Auckland, fall in most other regions

Property

Good news for Aucklanders with the number of new dwelling consents up and average values falling, suggesting a shift towards more affordable new housing

30th May 18, 11:21am by Greg Ninness

New dwelling consents continued their steady rise in Auckland in April, but dropped back in most other parts of the country.

The latest figures from Statistics NZ show that 2729 new dwellings were consented throughout the country in April, down from 2926 in March but up by 29.6% compared to April last year.

In the 12 months to April 32,015 new dwellings were consented nationally, up 5.4% compared to the previous 12 months.

However in Auckland, where the housing shortage is greatest, new dwelling consents continued their steady rise, with 1163 new homes consented in April compared to 1082 in March and just 726 in April last year.

The other good news for Auckland is that the average value per new consent dropped back to $349,097 in April , compared to $390,018 in March, suggesting much of the increase in new homes being built is at the more affordable end of the market.

However the figures were more subdued in most other major centres, with the number of new dwelling consents issued in Waikato, Wellington, and Canterbury all showing major falls compared to March, and smaller falls recorded in most other regions.

The figures also show a clear trend to more multi-unit housing with 3536 apartments consented in the 12 months to April, up 23% compared to the previous 12 months, while retirement village consents were up 15.3% and townhouses/units were up 9.3%.

Although stand alone houses remain the predominant type of new home being consented by a substantial margin, the 21,009 houses consented in the 12 months to April was down 0.8% compared to the previous 12 months.

On the commercial property front, $529 million of non-residential building work was consented in April, up 28.8% compared to April last year.

The total value of all building worked consented in April (residential and non-residential) was $1.67 billion, up 23.6% compared to April last year.

In the 12 months to April, $21.1 billion of new building work was consented, up 8.5% compared to the previous 12 months.

The interactive charts below track residential building consent trends over nearly 20 years.

Building consents - residential

Select chart tabs

Source: Statistics NZ

Building consents - type

Select chart tabs

Source: Statistics NZ

Building consents - growth

Select chart tabs

Source: Statistics NZ

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41 Comments

by Roger Witherspoon | 30th May 18, 3:16pm 1527650182

32,015 new dwellings were consented nationally, which should just about house the 70,000 new arrivals, at 2.18 people per dwelling. So that's all good then?

by JimboJones | 30th May 18, 11:47am 1527637672

Assuming they all get built and are in the right locations

by Grendel | 30th May 18, 12:03pm 1527638589

At least someone is building something. But you are right, we have a long way to go.

by Houses Overpriced | 30th May 18, 1:00pm 1527642031

Lol 2.18 . Stats vs reality. . One of the houses I went to see had 11 living in 4 beddie

by Grendel | 30th May 18, 1:10pm 1527642655

Wow, how many bathrooms?

Sounds like we are using the wrong metrics and should be calculating stats on a per room basis. I feel like maybe a bunk bed factory is a good investment.

by Houses Overpriced | 30th May 18, 1:19pm 1527643171

1 legal, 1 with no permit

by Grendel | 30th May 18, 2:32pm 1527647553

Sounds amazing. I'm going out on a limb here and assume you're not interesting in it?

by Houses Overpriced | 30th May 18, 3:08pm 1527649692

No way. I went to see it as the agent was raving about the property. When I turned up, he was boasting that it's a cash cow. ..

by Alter Ego | 30th May 18, 11:39am 1527637171

Are they affordable, at future interest rates, for young people...gambling on their future.

by Auckland | 30th May 18, 11:49am 1527637752

Future interest rates will go back up to where it was before the last GFC. And I was paying 10.5% floating.

by Boatman | 30th May 18, 12:12pm 1527639126

You know I am astonished that the Government has not got some kind of register where people can indicate their housing requirements so they know how big the problem is ( or is not)

Does the Housing Minister even know precisely how may homes are needed ?

Or did 100,000 houses just sound like a really nice number ?

There should be some kind of register or database of actual needs w.r.t. housing requirements

There should be catagories :-

City
Region
Size requirement 1 or 2 or 3 bed
Rent ?or Buy ?
Require State housing ?
Do you have a deposit ?
How much ?
When do you require accom ? Immediate , 1 year 2 years or in 5 years time ?
Are you an investor ?

For example , we have three adult children who all have a 10% deposit for a $500k home.

They require a 2 bed unit , ideally . What we dont know is how many people there are out there who have the same requirement ( or any requirement )

by mfd | 30th May 18, 12:26pm 1527639976

It's hard enough getting everyone to fill in a census form every few years, good luck with this. Although I consider myself fairly left wing, I'm not sure if the kind of centrally controlled economy you're proposing here is the best option. In other countries the market is perfectly capable of allocating housing at a reasonable price, the same should be possible here if we can set things up correctly.

by Boatman | 30th May 18, 12:38pm 1527640715

@MFD , I am not for one moment suggesting that the Government provides housing ........... it simply cant do so .

What I am proposing is that we obtain accurate statistics of present housing demand ( requirements) , as well as future housing requirements .

The truth seems to be that we dont actually know whats required .

Some economists say 30,000 is the backlog, some say 50,000 labour says the magic number is 100,000 whats the truth ?

This will help both Government planners as well as the housing industry and its doppelgangers like the supply chain and those training chippies like AUT , etc

And we need to recognize that something like 40 % of Kiwis live in accommodation they do not own , so we must accept that not everyone is going to won their own home in a future NZ .

We should plan to have at least 40% of the market supplied by investors be they individuals or corporates (like we see in Germany ).

Another solution is where the State supplies 99 year leasehold land with the annual rent limited to say 4% of the GV of the land ( 4% being the cost of borrowing ) .

99 year leasehold is a good as title , and it works in places like Singapore

by mfd | 30th May 18, 12:53pm 1527641591

I think it's more complicated than that. 'Needs' vary with costs, for example your children might need a 2 bed but if they could afford it they might go for a 3 bed, to have a spare or space for future children etc. Renters living 10 to a house might really want a place to themselves but can't afford it. Do they need a single bed flat? It's all far more complex than you are presenting. Maybe there are couples in single bed flats which is all they 'need' but they are putting off having a family because they can't afford a 2-bed place. It's easy to see how different methodologies can get to different results on how many houses are needed.

You could take the average occupancy, and divide the population by this to provide the number of houses 'needed' but this would ignore how average occupancy itself will change in response to costs, demographic changes and societal changes. And those demographic and societal changes themselves will be depending on costs and other factors. How do you untangle all that and get a single number out of it?

by steven | 30th May 18, 12:54pm 1527641694

"cannot do so" yet when you look at the building program post WW2, or housing NZ's stock clearly the Govn can provide housing.

My personal view is at some point only a Govn can provide, the Q is how does it do so? ie it can keep houses affordable by significant "interference" in the housing market making silly price rises heavily taxed, or provide housing for rent cheaply thus removing the demand on the private sector and keeping costs down that way.

Which ever way if you want to actually do something you have to take on the costs of doing so and no one wants to pay.

ergo this mess will continue as is.

Like I keep saying, the only way to fix this is force buy the land surrounding Auckland enmass at a "reasonable price" off the land bankers and re-zone it en-mass and throw it onto the market at cost and let small builders buy it and develop it, that should save 100k~150k per house right off.

by Nzdan | 30th May 18, 1:04pm 1527642240

We just need several platoons of young fit returned servicemen to pick up some hammers and get to work.

by Grendel | 30th May 18, 1:29pm 1527643745

So your answer is more sprawl? In a city that already has a massive infrastructure problem and lacks reliable public transport?

You haven't thought that through properly.

by Brendon | 30th May 18, 1:49pm 1527644972

One answer is to have a close look at why intensification is not working as well as it could and find ways to improve it. I have had a massive twitter discussion about that today based on those issues.

Currently in NZ the way we do intensification -is basically infil or sausage flat housing. It is rubbish compared to the beautiful cities that are being built overseas.
https://medium.com/land-buildings-identity-and-values/would-streetscape…

My initial solution was to look for how neighbours could cooperate or how new through laneways might be better than long driveways. But that didn't work for all residential blocks.

So I came up with a solution whereby whole residential blocks could intensify.
https://medium.com/land-buildings-identity-and-values/can-great-design-…

by steven | 30th May 18, 2:14pm 1527646475

Interesting Brendon, in theory anyway. I am left wondering on the costs and if its doable in practice. ie If it were a Green field site then intensification is "easy" the trouble is it isnt. Would we get the enmass co-operation? how is it managed? I dont believe so the idea is a non-starter I suspect.

by Grendel | 30th May 18, 2:20pm 1527646823

That looks really good, we are definitely at the point were intensification needs to occur and as stated in the article we will be able to get more value of out public investment in infrastructure that way.

by steven | 30th May 18, 2:04pm 1527645856

Hi,

Actually I have on a higher level, but lets put that aside for a moment (that is another thread). We have cities around the globe that stretch for miles and have populations 10 times the size of Auckland so you are saying we cant do it a bit more? Long term no we cannot grow for ever but short term the National Govn has boxed the country into a corner with its 9 years of incompetence and now it has to be cleaned up.

Pricing, when you look at the costs of a new house its made up of 4 substantial components a) land cost, b) infrastructure cost c) build cost and d) profit margin(s).

a) land cost "technically" this is the easiest to address, land is a significant and un-realistic % of a new build adding a lot to affordability.

b) infrastructure cost, this is a substantial part of the new cost and stays, hence the funding for infrastructure like sewage is built into this (in theory). Other ways to pay for it is MUDs but they seem bad in TCO terms.

c) building costs, not sure if much can be done about this one.

d) throw cheap land enmass at builders and there is the potential to cut the substantial profit margin expected as there is competition.

So go back to b) when you have a growing population then you have to provide more housing. Just how you do this (traditionally) is is to sprawl when you need scale, infill wont cut it IMHO and potentially you end up with ghettos, bad outcome.

In effect then the bigger picture is as the only practical and cost effective long term option is to stop immigration IMHO to relieve demand. Short term we still have to clean up.

Really ultimately this problem isnt solvable without drastic measures what ever measure that is.

by Ex Expat | 30th May 18, 2:07pm 1527646079

So, you are saying that the CoL can resolve this if they have the courage to do so?

by steven | 30th May 18, 3:27pm 1527650860

I do wonder if actually its even solvable. If it is, the methods I see as possible are pretty drastic and/or expensive. I am not sure the word is "courage" but I do think it would take drastic steps to fix this (what ever they are) and not the path presently being undertaken I see that as failing. The problem is really I see no sign the voter wants to take the [financial] consequences of such drastic action (whatever that is) to fix this, really the CoL is on a hiding to nothing IMHO.

However at the end of the day while most of this mess isnt this Govn's fault I think the voter will blame them for not fixing it come election time.

by Ex Expat | 30th May 18, 6:51pm 1527663080

As was written last week, "CoL supporters voted for change, not a history lesson". If a vote was given based on political promises by Labour that they could fix the problem, and they had the power to do so, but didn't have the courage, then they deserve to be held to account. House prices climbed during the prior Labour Government as well. There is no moral high ground here, but only one party promised to build 100,000 houses. They need to be held accountable.

by RickStrauss | 31st May 18, 11:30am 1527723023

I agree, XXPat. I was in favour of holding National accountable for their failure to deliver on their campaigning on the housing crisis in 2007 - where others were less in favour of accountability - and I'll be in favour of holding this government to account for their carrying out their promises.

They've got 9 and a bit years left to go to achieve this one, so they need to get moving. And they do need democratic pressure on them to keep their campaign promises, just as National should have had.

The level of dishonesty and cynicism that Key and co ended up displaying in the end should not be tolerated.

by Ex Expat | 31st May 18, 11:47am 1527724029

I admire your long term view, but if you think the prospective home owner is going to give the CoL nine years sucking on the tax payer teat to do diddly squat then I think you are mistaken. $4 billion dollars of pork barrelling is not translating into votes for NZF and National support is strong at 45%. We’re like the cat sitting outside the rat’s nest waiting to pounce. At some stage they have to come out to forage for more tax payer dollars.

by Pragmatist | 30th May 18, 12:28pm 1527640127

Well, if the govt is asking i require (mmhmm, absolutely require!) a 3bedroom or 2+ study, 3 car garage, in auckland (central, not out in the wop-wops), and yes, it needs to be a state house, $50 deposit, need it immediately, and yes, i have money in shares and other investments.

Do you really think you are going to get any useful information?

by Boatman | 30th May 18, 12:43pm 1527640980

@pragmatist , do you have an alternative ?

Both you and I know that this is not the 1970's when we got a section for $35k and plonked a board and batten on it for another $35k .

Things will never be like that again , so we need to understand the "new normal "

We dont actually know what the real demand is .

Labour says there is a 100,000 home shortfall

Are the people seeking homes renters or buyers or HNZ cases ?

Who knows ?

by RickStrauss | 30th May 18, 1:03pm 1527642216

Both you and I know that this is not the 1970's when we got a section for $35k and plonked a board and batten on it for another $35k .

Good to see a more realistic summation than the usual silly rants folk out there put forth, that things have always been as hard as they are now for young Kiwis, and that it's all the fault of smashed avocado.

by Ex Expat | 30th May 18, 2:05pm 1527645947

My first fulltime job in the early 80s paid $4,900 per annum....

by custard | 30th May 18, 6:18pm 1527661098

Wow - I was really flying then at $6,000 in '78....

by Pragmatist | 30th May 18, 2:49pm 1527648574

Once the houses are there the market will sort out whether the occupiers are owners or renters, and we have enough information to know that we need a quite a few extra houses. So for now we can start building and worry about when to wind it up once some of the overcrowding issues are sorted.

And yes, the govt does have plenty of info.. they are the ones that pay accommodation supplement. emergency accommodation, and there was a census recently. Between those sources there is plenty of info to get a "good enough for now" picture. We don't need perfect information, nobody is going to complain if they end up in a place that is slightly bigger than they need.

by bilbo | 30th May 18, 3:44pm 1527651874

But what about earthquakes, health and safety, wind zones and unique new nizland conditions.
What will someone do if they stub their toe? Just take personal responsibility?
What will the owner do if it blows over? Just build another cheap house one? Ludicrous!
It's a good thing the state protects me with soil reports, BRANZ, council engineers, scaffolding, site safe, high quality NZ specific materials like tin roofing and cold aluminium window frames. If the experts tell us to bend over and get out our credit cards they must be right.

by Houses Overpriced | 30th May 18, 1:05pm 1527642326

Prices per home dropped to 349 from 390, and people thought the only way was up.

The focus is now on affordable houses, not 240sqm mansions

by Grendel | 30th May 18, 4:12pm 1527653547

Well put! It seems like a good sign that consents are seeing a swing toward higher density style houses in Auckland. Its about time we started building that way. It can be done well and we more than have the demand for it.

by Yvil | 30th May 18, 4:00pm 1527652805

HO, just to be clear, these are prices for consents for "dwellings" and as stated in the article, there is a larger proportion of apartments and townhouses being consented. But yes, good that more, cheaper dwellings are being consented. Must be Kiwibuild (being sarcastic)

by Houses Overpriced | 30th May 18, 8:14pm 1527668053

Yvil, the article pertains to consents, why confuse yourself

by bilbo | 30th May 18, 1:26pm 1527643612

I just got through a building consent and one of the expenses was a $460 fee to BRANZ - the very people that are making building materials more expensive.

by Grendel | 30th May 18, 2:05pm 1527645918

I feel your outrage bilbo. It seems heinous to be forced to feed a system you believe is damaging the country.

by bilbo | 30th May 18, 3:35pm 1527651319

It's paying a fee to be financially raped. And kiwis generally support it once they're home owners because they got the same treatment and now it's their turn shaft everyone else.

Without these corrupt experts pushing paper around people would have the freedom to build much nicer homes.

The attitude of "everything has to be certified safe for X,Y,Z" is like mandating everyone to drive around in hummers because they're safer and more durable. Most people don't like the cost of hummers and are quite happy with a Toyota. If your corolla is crashed into you just replace it. We should be aiming for simple kitset style houses.

by Chairman Moa | 30th May 18, 5:56pm 1527659768

Buyers from mainland are looking elsewhere, starting on this side of the ditch
https://www.domain.com.au/news/foreign-buyers-of-australian-real-estate…
https://www.news.com.au/finance/economy/australian-economy/house-prices…