New dwelling consents were at elevated levels in Auckland last month, but down in most other main centres

New dwelling consents were at elevated levels in Auckland last month, but down in most other main centres

The volume of new dwellings consented nationwide was steady in July, with Auckland consents particularly strong and other centres weaker.

The latest figures from Statistics NZ show 2752 new homes were consented in July, broadly in line with June when 2792 were consented, and with July last year when 2762 new homes were consented.

But the news was more upbeat in Auckland where the housing shortage is greatest, with 1250 new homes consented in the region, up 24.9% compared to June and up 61.5% compared to July last year.

New dwelling consents in Auckland have been above 1000 per month for the last five months and above 1100 for three of those months.

That is the first time consents in Auckland have ever been above 1000 per month for five consecutive months, according to Statistics NZ data, suggesting residential development activity in the region is starting to gather some serious momentum.

The highest level of new consents within the Auckland region was on its more affordable southern flank, with 256 new dwellings consented in the Manurewa-Papakura ward in July, followed by Albany at 223, Waitemata and Gulf 182 and Waitakere 119, with the rest spread throughout the region.

However consents eased back in other major centres with July's numbers down in Hamilton, Tauranga, Wellington and Christchurch.

The figures show particularly strong growth of medium density housing compared to other forms of construction, with the number of townhouses and home units consented throughout the country July up 52.9% compared to July last year, while the number of stand alone homes consented throughout the country was down 8.9% compared to July last year.

On an annual basis, the number of townhouses and home units was up 26.1% in the 12 months to July compared to the previous 12 months, apartments were up 36.7% and stand alone houses were down 1%.

The interactive charts below track new dwelling consents issued in all regions of the country since January 2000.

Building consents - residential

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# Southland

Building consents - type

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We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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31 Comments

low sales and increasing supply = falling prices!!!

New houses being built around NZ will increase prices.
If there are too many built in Auckland where there are so many people that aren’t earning or receiving enough money to live then yes they may reduce slightly.
Wouldn’t be holding your breath though waiting for prices to drop heaps as you will be long gone!

New houses being built around NZ will increase prices.

That's an interesting theory.
Care to elaborate why this wasn't the case in your Christchurch hometown after the rebuild started?

he doesnt think much before blurting..

Simple explanation: the LURP threw the doors wide open to Mo' Land Availability, the TLA's vigorously competed amongst themselves for new ratepayers, and the insurance payouts gave homeowners with ruined houses the wherewithal to finance a new build without a nose-bleed-high mortgage. Hence plateau'ed and affordable houses and plots: plot prices start with a 1, house+plot with a high-3 to mid-4.

It's a great example of how lack of land strangulation via planning, hence Supply, allows Ms Market to weave her wicked ways with Price.....

So you mean building new houses reduced prices?!

A miracle!

The exodus of people would've helped as well though.

The majority of exodus was to local areas, though.
So, as waymad points out, the correction was more likely due to an increase in the elasticity of supply of houses facilitated through relaxation of LURs.

Population was definitely a factor. Stunning oversimplification to think supply was the one and only influence. Both population changes and housing supply had an impact.

Look at this graph of Christchurch's population. The population drop after 2010 would have had some effect, even if a small effect, on housing demand https://www.parliament.nz/resource/2686787

I'm not saying it didn't have an effect. I'm saying that it is nowhere near the main driver.
The main driver of house price correction was the increased supply in the greater CHC area.

Use this.
http://nzdotstat.stats.govt.nz/wbos/Index.aspx#
Look under population.
There was no drop in core working age population - ya know, the people who buy houses.

Er, but how many new Auckland residents does 1000 houses a month house? At 2500 new arrivals per month doesn't the shortfall just keep growing?

You forgot about the 2499 leaving per month as cant afford it and over the traffic

It is only about 1600 a month leaving.

DP

There's also the internal movement of New Zealanders from the regions to Auckland - a number difficult to arrive upon but definitely worsens the city's housing shortage.

Statistics NZ have estimated it, in 2017 32,000 internal migrants arrived in Auckland and 45,000 exited. Internal migration is making Auckland's housing shortage less of a problem every day.

https://www.stats.govt.nz/reports/internal-migration-estimates-using-lin...

The highest level of new consents within the Auckland region was on its more affordable southern flank, with 256 new dwellings consented in the Manurewa-Papakura ward in July, followed by Albany at 223, Waitemata and Gulf 182 and Waitakere 119, with the rest spread throughout the region.

A lot of spread in Auckland, where consents run about 50% up to 50% out ratio.

Cheers Greg - Can you include REINZ stratified HPI data when next report comes out? I feel omitting it will feed the Doom and Gloomers. Looks like more apartments and townhouses are or will soon be coming online, putting downward pressure on median sale price, when this does not reflect value of existing stock, particularly stand along houses.

I'm a big supporter of high quality, high density, lower cost development - only realistic way to bring down median price I think. More affordable typologies bringing downward pressure on median price is a good thing, not a sign of housing market collapse.

BLSH, what happened to your prediction that Boomers would be seeking low maintenance apartment life and support prices? You own a standalone house in Papamoa, leveraged against the same in Auckland. This more than likely means yours is hardly an unbiased and insightful forecast. It's more the wish of a spooked speculator.

If it's all getting to you, sell.

Haven't changed my view. Some boomers will be wanting high quality apartments for sure. Lots of smaller and cheaper townhouses and apartments coming online too. No doubt this will affect median sale price. If nothing but 1 bedroom apartments are sold in NZ next month, the median sale price will drop massively, but that doesn't mean the value of stand alone houses has reduced at all. See my point?

I also maintain my view that the Papamoa sunshine would help with you chronic case of doom and gloom syndrome.

Some Boomers will always want low maintenance apartment lifestyle. I think your view is shifting in light of some seriously negative news and right now, you're just covering your butt. If you've changed your view - big deal but why waste time denying it dude!. It reminds me of TTP and his ever shrinking story of a buoyant Auckland. Like TTP, you too will soon be left with just seawater. At least its value is constant ;-)

Housing from an investment (capital gains) perspective is set to seriously underperform and it seems you bought at the top. If you've not leveraged your socks off then you need not reserve space on your fridge for the latest spot values - right? Your kind (shivering speculators) are a dead giveaway.....

I stand by every single prior comment I’ve ever made 100%.

Wondering if you’re going to backtrack on your -5% YoY in December prediction though.

I've no reason to backtrack. No matter what transpires, I'll still be around to own my predictions and make some more. On the other hand, in time, you'll more than likely disappear from this forum. Your kind usually do that.

Suggest you reserve space on the fridge for your kids drawings, they'll appreciate in value.

Looking forward to your future predictions so I’ll know what’s not going to happen.

Ha-ha-ha :) what? like your quick conclusions that peace broke out on the Korean Peninsula? I still think you're very naive to think NK would willingly surrender its Nukes and not seize the opportunity to build more. You need to practice some insight, that's your problem.

.

Like to see a New Starts figure versus Consents then it's real. Is there such a Stat.

Is medium density housing made of medium density fibreboard (MDF)?

Unless its also leaky... then its a soggy cardboard box.

One thing I am watching for is how the consents are used next.

There are some firms that specialize in obtaining consent and then sell the land and consents as a package onto a developer. They look to pick the best time to get consent and sell the package when the price will be highest, which normally means a shortage of consented properties. The fact certain types of consented properties are increasing could mean a rush to get these to market while the going is good.

While this sounds like good news for increased supply of properties, what it can mean is those developers, and then following end users that have bought these projects have paid top dollar just before the extra supply will cause future market prices to top.

There are also developers that get consent and develop, as well as the firms that only specialize in getting consent but either way, one of the key indicators of a consenting development market predicting trouble ahead is when you seen know developers trying to sell their consented projects onto other (more naive/the great fool/overly confident?) developers, ie they don't want to develop themselves because they see the writing on the wall.

What happens next with many of these consents will be telling.

The yuan exchange rate is dropping = buying overseas will be more expensive = lower demands = price drop