![Construction workers](/sites/default/files/2022-08/ConstructionWorkers.jpg)
Capacity constraints in the building industry continue to take their toll on the number of new homes being built in Auckland.
The latest figures from Auckland Council show that it issued 1246 Code Compliance Certificates (CCCs) for new dwellings in June.
Unlike building consents, which are issued before construction starts, CCCs are issued when a building is completed and are the best indication of new housing supply.
Auckland Council issued 1246 CCCs in June, down from 1532 (-21%) in June last year but well ahead of the 926 (+35%) it issued in pre-pandemic June 2019.
However the June 2021 figure was exceptionally high and the monthly figures can be particularly volatile because they can be affected by the timing of completion of large projects such as apartment blocks.
A better indication of the trend comes from the rolling 12 month monthly average.
This clearly shows a slow decline in the number of new homes being completed in Auckland, with a strong rise in completions up until they peaked in the middle of last year and then a slow decline.
This shows that the average number of new homes being completed in Auckland each month has dropped by 10.6% over the year to June.
You can see that trend quite clearly in the graph below.
You don't have to look far to find the likely culprit.
Separate figures from Auckland Council show the percentage of new dwellings that receive their CCC within two years of obtaining their building consent.
In the first half of 2019, before the Covid pandemic disrupted the industry, the number of dwellings receiving their CCC within two years of their building consent being issued was between 94% and 98% each month.
In the first half of this year that figure had dropped to between 78% and 89%.
That means that on average, residential building projects in Auckland are taking longer to complete.
If you have an industry that is operating at full capacity and it starts taking longer for it to complete work, it is inevitable that output will decline.
Given the disruptions that have plagued the construction industry over the last couple of years, initially with pandemic lockdowns and then with supply constraints, the current drop in the number of new homes being completed each month should come as no surprise.
Considering the extent of the challenges the building industry has faced recently, a 10.6% drop in output over the last 12 months suggests it may have coped better than might have been expected, and the number of new homes being completed remains well above pre-pandemic levels.
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15 Comments
Could the Council coc team being down on staff during the school holidays window. Watch for an uptick next month before any major conclusions.
It’s all about supply remember
Good - can't break records forever
... " we're still getting more houses actually built than when National was government ... we're coming off a Covid19 disrupted base ... supply chain issues are hampering materials arrival ... if Putin hadn't declared war on Ukraine " ...
Just lining up the inevitable litany of excuses before housing minister Megan Woods does ...
Surely if open homes are empty, houses arent selling (and prices are falling) and there are more rentals on the market and more people ae leaving NZ than arriving - then there is no longer a shortage of houses? And thus no race to build more? In fact should we not be careful not to crash the market too far by having too many homes?
I.e. if people arent lining up to buy or rent the stock we have and the stock that is coming to market.. then we might be best to slow down a LOT.
I am not sure i ever understood the argument about a shortage - aside from the need to build tons of houses for all the incoming migrants.... but we never kept up with the infrastructure needed for those migrants anyway... nor controlled the rate of influx. So it was all a bit chaotic and pointlessly pushed up prices
There has been a big wealth transfer to the better off. Perhaps they will fill their boots on property later this year as a way to park money (admittedly at a loss for now) until things turn around, if they ever do. Does anyone here have that plan?
I wasn't going to "fill my boots" but I was considering buying a rental. For a whole lot of reasons, I now think you'd be better off with term deposits or Kiwi Bonds (if it gets really ugly), until things settle.
Prices are way out of whack with where they reasonably should be relative to incomes, so perhaps better to keep building in volume - with govt taking up the slack by hiring out of work builders if they're there.
Tipping over the edge of the waterfall.
Complete and utter decimation of the industry in how many months? 6? 9?
Yeah between 6-9 months.
A decent number of projects still have around 4-6 months till completion, but forward workload beyond current projects is looking miserable for many.
Where will all those builder types go? The Mines of Oz?
Some might
You can't blame em if they do. I wonder if we get a mass of chinese migrants to take their places
The number of people that can afford to buy a new home in Auckland is also down on it's peak.
Coincidence ?
"In the first half of 2019, before the Covid pandemic disrupted the industry, the number of dwellings receiving their CCC within two years of their building consent being issued was between 94% and 98% each month.
In the first half of this year that figure had dropped to between 78% and 89%."
Fact
"Given the disruptions that have plagued the construction industry over the last couple of years, initially with pandemic lockdowns and then with supply constraints, the current drop in the number of new homes being completed each month should come as no surprise."
Compelling, an opinion
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