Residential construction shows no sign of slowing down with the number of new homes consented hitting a record high in the fourth quarter of last year.
According to Statistics NZ, 11,291 new dwellings were consented in the fourth quarter of 2020, surpassing the previous quarterly record of 10,713 set in 1973.
That took the total number of new homes consented last year to 39,420, up 4.8% from 2019, which is impressive given that 2020's figures were affected by the COVID-19 lockdowns.
That suggests a record number of new homes could be consented this year if current trends continue.
However the number of homes being consented is still low compared to population size.
"If population size is considered, the figures from the 1970s are still much higher," Statistics NZ's construction statistics manager Michael Heslop said.
In 1973, 13.4 new homes were consented per 1000 residents, but in 2020 just 7.8 homes were consented per 1000 residents, Statistics NZ said in its release with the latest figures.
While the overall growth in new homes consented was almost 5% last year, there were some surprising changes in the mix of homes being consented.
The number of apartments consented was down 21.5% compared to the previous year, after 34.1% growth in 2019, while retirement village units were down 21.9%, reversing the 30.6% growth achieved in 2019.
The big growth was in townhouses and home units, which were up 41.4% last year following growth of 26.5% the year before that.
Stand alone houses are still the biggest category of homes being built but their numbers were almost unchanged last year compared to 2019 (see the first chart below for the monthly trends in housing types being consented).
In Auckland 16,656 new homes were consented last year, up 9.9% compared to 2019.
Other regions to record substantial growth in new dwelling consents last year compared to 2019 were Hawke's Bay +46.6%, Taranaki +25.0%, Manawatu/Whanganui +8.8%, Tasman +10.0%, and Canterbury +11.1%.
However the number of homes consented was down compared to 2019 in Northland -11.1%, Waikato -5.1%, Gisborne -3.0%, Wellington -5.1%, Nelson -18.9%, Marlborough -11.2%, West Coast -17.3%, Otago -13.4% and Southland -5.8% (see the second chart below for the monthly trends in all regions).
The total value of building work for all of the new homes consented last year was $14.533 billion, up 4.6% on 2019.
The commercial construction sector did not fare so well last year, with consents for $7.047 billion on non-residential building work issued in 2020, down 5.5% compared to 2019.
The total value of all building work consented last year was $24.078 billion, up 0.7% compared to 2019.
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24 Comments
Good stuff, just need another at least 5 years of that load to catch-up.
It is good stuff but another 5 years of that will only (hopefully) compensate for the estimated (unnecessary) population growth of 100K PA, which will no doubt recommence pretty soon. So maybe not a catch up but more a case of not continuing to go backwards.
Several factors suggest that we could easily beat the pre-Covid net migration trend of 100k p.a. or so once our borders reopen.
There is the obvious pent up demand for skills in our economy - most of which is actually a cover for shoddy businesses seeking wage suppression and rental inflation.
Hundreds of thousands of economic refugees will gladly take our high-cost, low-wage country over their overcrowded hometowns left battered by the Covid-led recession.
Good progress.
The discrepancy though between the early 1970s and now though is even greater than it appears as household sizes are much smaller on average now.
I'm waiting for the border reopening, there is a Tsunami of overwhelming demand waiting to be unleashed upon the unsuspecting population.
"Give us your retired, your whores, your huddled masses yearning to buy property, the middle class refuse of your teeming shore..." ;-)
But what's gonna happen to all the rich kiwis who (supposedly) returned from overseas last year? Wouldn't that (mythical) horde go back to the UK and Aus as soon as possible?
Lets hope Adern does not revert to mass migration once the border reopens.. maybe the supply demand imbalance will correct itself.
GDP only grows if population does. Of course the borders open back up.
But more importantly, does GDP per capita grow?
Umm... well... Hey look, a climate emergency!
But more importantly, does GDP per capita grow?
No. But the govt and the media don't talk about GDP per capita. It's a good metric to understand the fraud when they hold up the GDP chart and tell the sheeple how great economic growth is.
Wellington is a problem
Apartment consents down 21%. Surprising ?
Er, CV19 flight from centre. + No foreign students etc
Last 7m sales in Auckland Central, compared to a year earlier = down 1.3% (yes, I said down)
Meanwhile NSC sales up 64%
If population is dense (no laughing...) then their off
'in 2020 just 7.8 homes consented per 1000 residents,'
You need 3 per 1000 just to replace obsolete homes.
Shame we can't get a rolling average but as I understand it this consent per 1000 is a new stat. for Statistics NZ.
They can try ramping the consents to 70's levels and shut the country down from migrants and returnees but it will do nothing to the increasing median house prices.
It's time to act now for FHB! You may not find your ideal house but get your foot in the door first- you will have options later only when you're already in!
Every metric points towards a diminishing end point in the buying capacity for the average FHB this year. Banking on the lovelies in the Beehive for help will only cause you more misery- the more they meddle with the market the more oppose their desired results becomes. As of today, it costs you over $500 a day waiting and will only become dearer for the rest of the year.
Stop subscribing to flat-earthers, property bears and doomsday prophets; they like to throw economic terms to credify their vaporware theories, with little understanding of what they're talking about and had been proven wrong for years on end.
Wishing you all well in your property adventure and a new quest in life.
Your post reads like a troll narrative.
LOL.
It had almost everything tossed in except "Owning your own home is the only way to gain security and stability for you and your family."
The fundamental problem is that FHBs want to start where their parents finished off.
Their grandparents, not parents.
And yes, the 1950s.
Yes, they would like to start at 3x median income multiple.
Not at all, they want to start in the vicinity of where their parents started off. Not sure where you got your idea from, it's not like FHB's set the home start grant level higher for new builds than existing builds. FHB's didn't invite investors to compete with them in the lower end of the market where the investment yield is, something their parents didn't have to battle with in their day.
I'd be extremely happy to start in my parents first home where I grew up. 3 bedrooms on a big section in a nice suburb. Section cost plus the Lockwood house built on it, all for 4 years of Dad's salary. Mum didn't work of course.
I purchased my first home in 1973 and it is hard to remember what was happening then and why so many houses were being built. The question seems to be is history repeating itself? Uk entered EEC then and that along with oil shocks pushed us into a decade of economic problems. This year UK is leaving EEC and wants to have its marriage back. I do not want another decade of suffering. We will suffer if we trust them again. We have all figured we are located South of China and that is what is going to influence our lives even if we cannot speak their language.
Better slow down. If the housing shortage ends how will we keep the small price increases going?
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