15 year high for Auckland consents

The latest Stats NZ data shows that there were 1,450 new dwellings consents issued in Auckland in November 2017.

Stats NZ construction statistics manager Melissa McKenzie says this figure was the second-highest level on record for the region.

“This is beaten only by October 2002 when nearly 2,000 new homes were consented due to a much larger spike in apartments.”

The rise in Auckland consents helped lift the national total of new dwellings consented to a 13-year high of 3,262 in November.

In seasonally adjusted terms, the number of new homes consented rose 11% in November, following a 10% fall in October.

McKenzie says that November’s rebound in consents was driven by apartments, which tend to fluctuate a lot and were particularly low in October.

“Looking at the longer-term picture, building consents for apartments and townhouses have seen double-digit growth year after year, while consents for stand-alone houses have levelled off.”

In the 12 months to 30 November 2017, consents were issued for 31,123 new dwellings. This compares to the year to November 2016 when consents were issued for 30,399 dwellings.

Consents were issued for 3,137 apartments in the November 2017 year, compared with 2,692 in the November 2016 year.

ASB senior economist Jane Turner says the dwelling consents bounce back shows house building demand is apparently less concerned by the change in government than expected.

“Looking ahead over the next few months, additional uncertainty, as developers await further details of the proposed KiwiBuild plan, may weigh on construction demand but this should be a short-lived dip. 

“We expect further growth in Wellington housing construction over the coming year and for Auckland activity to hold up at very high levels.”

Westpac senior economist Satish Ranchhod says the rebound in consents was even stronger than the 7% increase they had factored in.

Underlying the pick-up in consent issuance was firmness in Auckland, where there were 10,700 new dwellings consented in the year to November, he says.

“That’s up 5% on the previous year and includes a 23% rise in apartment consents in Auckland over the past year.

“Importantly, if Auckland can sustain the pace we’ve seen in recent months, it would finally start eating into its significant shortfall of housing (albeit, very gradually).”

He adds that the level of residential building activity will remain elevated for some time and will increase at a gradual pace over the next few years.

“As we’ve highlighted for some time, rising costs, as well as difficulties sourcing skilled labour and credit have provided a brake on activity.”