New residential building up by 6.7% in year to October

Property

The number of stand alone houses and retirement village units being consented is declining while multi-unit housing is growing strongly, Statistics NZ says

30th Nov 18, 11:30am by Greg Ninness

The number of new dwelling consents issued throughout the country jumped to 2926 in October, up 14.3% compared to September and up 14.8% compared to October last year, according to Statistics NZ.

For the 12 months ended October, 32,925 new dwelling consents were issued around the country, up 6.7% compared to the previous 12 months.

The figures also show a trend to build less stand alone houses and more multi-unit housing such as apartments and terraced houses.

In the 12 months to October, 20,918 new stand alone houses were consented, down 1.3% compared to the 12 months to October 2017, and that was down 0.8% compared to the 12 months ended October 2016.

On the other side of the coin 3835 new apartments were consented in the 12 months to October, up 27.8% compared to the 12 months to October 2017, which was up 17.5% compared to the 12 months to October 2016.

Townhouses and home units showed even stronger annual growth of 31.6%, and they have have maintained extremely strong double digit growth in the number of consents being issued over the last five years.

But surprisingly the number of retirement village units being consented has declined for the last two years, down from 2034 in the 12 months to October 2016, to 1902 in the same period of 2017 (-6.5%), and down to 1895 (-0.4%) in the 12 months to October this year.

So although the vast majority of new homes being consented (63.5%) are still stand alone houses, that percentage is declining and all of the growth is coming from multi-unit housing.

Around the regions, 1077 consents were issued in Auckland in October, which was up 26.1% compared to September and up 14.1% compared to October last year, but down from the levels achieved in five of the previous six months.

Unless there is a substantial lift in new consents issued in Auckland in November, then it appears that consents will once again start to fall well behind what is required to keep pace with the region's migration-driven population growth.

However there was strong growth in October's consent numbers compared to a year ago in Waikato +20.9% and Wellington +34%, while consents were sluggish in Bay of Plenty -4%, and Canterbury +2.9%.

See the charts below for the full regional figures and to follow the trends in the types of dwellings being consented:

Building consents - residential

Select chart tabs

Source: Statistics NZ

Building consents - type

Select chart tabs

Source: Statistics NZ

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

24 Comments

by BuyLowSellHigh | 30th Nov 18, 12:07pm 1543532847

Good. Apartments and terraced units are the answer to the affordability question in my view. Stand alone houses with their own sections aren't going to get any cheaper in the long run.

Might actually be putting a dent in the shortage now. 70% of consents result in net additional units according to Core Logic, so of the 32,925 dwellings consented, 23,000 net additional units likely to be delivered. 22,960 units needed annually to accommodate net migration of 62,000 people annually at 2.7 people per household.

by Retired-Poppy | 30th Nov 18, 12:40pm 1543534846

BLSH, in a correction, there is nowhere to hide. "Gains in the long run". How long is your piece of string again?

by BuyLowSellHigh | 30th Nov 18, 12:39pm 1543534761

To the contrary, one can quite easily hide from a correction. Just ignore it until it until passes.

by Retired-Poppy | 30th Nov 18, 12:46pm 1543535181

....unless your BLSH, who obsesses over his latest spot valuation ;-)

by clone278 | 30th Nov 18, 12:44pm 1543535043

Does nothing for the overhang that already existed though. When rents start dropping we'll know the market has turned. I haven't seen that anywhere yet..

by mfd | 30th Nov 18, 12:48pm 1543535323

Christchurch is ahead of the game, rents are down 5-10% over the last 4 years, now back to 2013 prices. Great news, I hope the rest of the country can share our luck before long.

by Fegus Woodward | 30th Nov 18, 1:18pm 1543537092

Christchurch's luck heyzus wept.

by Yvil | 30th Nov 18, 3:23pm 1543544581

Com'on mfd, it's obvious Chch's rent are down because of the oversupply of rentals following the EQ. The rents went through the roof right after the EQ as many houses were inhabitable and there was a shortage, then after several years many had to rebuild as part of their insurance payout and there is from 2013 onwards an excess of rentals. That will not transpire to other parts of NZ

by mfd | 30th Nov 18, 4:22pm 1543548127

I was being somewhat tongue in cheek, yes it's an example of what can happen when you actually get to grips with a supply problem (whether intentional or not). Regardless, the outcome is very pleasant when rent rises are rarely seen and finding a decent place to rent is now relatively easy.

by Nzdan | 30th Nov 18, 4:49pm 1543549778

I remember being given notice because the landlord wanted to move in after cashing in his other property. Turning up to open homes with 30 other people, rent bidding etc. Was a real nightmare and stressful trying to find a place in such a short window.

by Sluggy | 30th Nov 18, 2:02pm 1543539777

The answer to affordability is lower prices or higher wages, DTI restrictions would do it nicely. Its that simple.

by Voiceofreason | 1st Dec 18, 10:11am 1543612262

If the Sydney and Melbourne markets continue to tank, and NZ stays high, I wonder what that will do to trans-Tasman immigration numbers? Mind you, there won't be jobs in Oz if that continues.
Up to 30% drops in higher end Sydney properties now, and still look pricey. https://amp.news.com.au/finance/real-estate/sydneys-biggest-real-estate…

by PropertyPrices2Fall | 1st Dec 18, 10:29am 1543613360

As per my comment on the other thread, there are signs houses are selling for less than the previous sale.. this will slowly start to increase the obvious cracks in the housing market

by Independent_Observer | 1st Dec 18, 12:45pm 1543621557

I think at the same time Jesus will be spotted drinking a matcha latte in Ponsonby.

by Henry_Tull | 2nd Dec 18, 11:32am 1543703553

or bowling
https://www.youtube.com/watch?v=GZR58d77a4A

by PropertyPrices2Fall | 30th Nov 18, 12:16pm 1543533373

clearly there is a push in the regions.. with NET migration LOSS of 3k from Auckland to the regions last year , there is a boost to the regions..

with the recent changes to Education (favouring the regions), suddenly the so called housing shortage will be non existent..

by clone278 | 30th Nov 18, 12:46pm 1543535192

But there's another 60k arriving next year and 40k to Auckland so plenty more work to do. Plus the regions will eventually become less appealing as the house price to income equation worsens.

by Yvil | 30th Nov 18, 3:25pm 1543544725

PP2F, are you saying Auckland has a net loss of population?

by PropertyPrices2Fall | 1st Dec 18, 10:24am 1543613085

You should know what I'm referring to, as its been stated numerous times..

If you don't, not sure why you keep commenting with such authority

by Boatman | 30th Nov 18, 12:53pm 1543535636

Our inward immigration numbers are still way too high for us to cope with, from a housing point of view .

by Wrong John | 30th Nov 18, 1:30pm 1543537844

Yes, they're poring into the coastal BoP. We've had the No Vacancy signs up for over a year now & they still keep coming.

by Yvil | 30th Nov 18, 3:26pm 1543544783

LJM, are you in the accommodation business?

by Nic Johnson | 1st Dec 18, 9:24am 1543609472

Lots of newly finished houses sitting empty in the BOP. How much of that will have been speculative development by soon to be retiring 'mum and dad' developers? Will all of them get out of the debt obligations they've taken on? There has been a 'baby boom' in development on the coast!

by Carlos67 | 1st Dec 18, 6:39pm 1543642773

In Tauranga this weekend and the level of new builds is insane, whole new sub divisions and existing houses for sale all over the place. No housing shortage down here, whole new streets going in with houses that are for sale that are not even in my GPS as yet. If there is a housing crash its going to hit real hard down here.