Consents up but trend slowing
Tuesday 1 May 2018
Kiwibuild construction is now underway and consents issuance has jumped up but that doesn’t mean an end to the housing shortage is in sight.
By Miriam Bell
The number of new dwellings consents rose by a seasonally adjusted 15% in March 2018, according to the latest Statistics New Zealand data.
This was driven by an increase in consents for apartments, townhouses, and other multi-unit projects.
Stats NZ construction statistics manager Melissa McKenzie says about three-quarters of the new apartments consented in March were in Auckland, boosted by three large projects.
“National new-home numbers continue to fluctuate month to month due to apartments and other large projects.”
In actual terms, 2,926 new dwellings were consented nationally in March, and 1,082 of those were in Auckland.
Stand-alone houses still accounted for 60% of new dwelling consents nationwide in March, but they were up by just 2.6% on the year ended March 2017.
In contrast, over the same period, apartment numbers rose 28% and townhouses, flats, and units rose 15%.
Overall, Auckland saw 11,192 new dwellings consented in the year ended March 2018, which was up 9.7% from March 2017.
This is a much needed improvement for Auckland which is generally estimated to need around 11,000 to 12,000 new dwellings built each year for supply to keep pace with demand.
However, ASB senior economist Jane Turner believes construction activity is close to a peak and that growth in Auckland consent issuance has slowed
“Housing construction demand in Auckland is high,” she says.
“But growth is muted as the number of consents in the region has trended sideways over the past six months. This likely reflects capacity constraints in the construction sector.”
Turner says growth in Wellington consents has been strong, but limited construction sector capacity may soon start to slow growth in the capital also.
“Both regions are undersupplied and new building rates remain below requirements for population growth.”
Westpac senior economist Satish Ranchhod points out that March’s rise in consents follows a period of essentially flat issuance since mid-2017.
Further, it was driven by apartment/multiple consents which are notoriously “lumpy” on a month-to-month basis so a sizeable pull back next month is likely, he says.
“Looking at the longer-term trend in dwelling consent issuance, home building numbers are rising at a very gradual pace, particularly in Auckland.
“We expect that overall building levels will increase only gradually due to shortages of skill labour, rising costs and difficulties accessing finance.”
Comments from our readers
No comments yet
Sign In / Register to add your comment
Prices remain high in the Auckland region but new data from two real estate websites indicates the market has shifted to favour buyers.
Technology and changes to the way people work are set to transform the commercial property sector and investors need to be attuned to these developments.
The demise of the capital gains tax proposal and record low mortgage rates will led to a pick-up in housing demand and boost the market, ASB economists say.