A record number of new homes were completed in Auckland in June following a surge in residential construction in the region.
Auckland Council issued 1742 Code Compliance Certificates (CCCs) for new residential dwellings in June, which was the highest number in any month since the Council began compiling the figures in 2013.
CCCs are issued when a building is completed and are the most accurate indicator of new housing supply.
June's figure was up 40% compared to June last year, and was the first time the number of CCCs issued for new dwellings in Auckland has been above 1600 in a month. It follows a surge in residential construction in the city.
June's figures also pushed the number of new dwellings completed in any 12 month period to a new high of 15,263 in the 12 months to June this year, up 18.3% on the previous 12 months.
Over the 12 months to June this year an average of 1272 new homes a month were completed in Auckland, also a record.
However that surge in the supply of new homes will start to decline at some stage.
It typically takes around two years to complete a dwelling from the time it receives its building consent, and recent building consent issuance has been tracking down, meaning eventually the number of new homes being completed will start to decline following a dip in new dwelling commencements.
So at the moment we are in the unusual situation of seeing a decline in building consents for new homes, while completions of the same are running at record highs.
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59 Comments
New builds from this point onwards are going to go off a cliff. Enough on the market now to carry through to mid 2024 when things start picking up again. Not everyone wants to live in those type of townhouses in the picture however, so if that's all that's flooding onto the market due to "Affordability" then your stand alone home is pretty safe.
Well Zwifter, the reason why there are so many townhouses is because stand alone houses are out of reach for too many people.
Isn't that what I basically said ? Still other clowns on here read into it whatever popped into their tiny heads.
"Standalone home is pretty safe" = "gEt In QuIcK"
"Things start picking up again in 2024" = "gEt In QuIcK"
You're dribbling again Zwifter, nobody is begging to pump your retirement asset anymore.....
These 10 Napier Townhouses have been for sale since October last year. Not a single sold yet.
https://www.trademe.co.nz/a/property/residential/sale/hawkes-bay/napier…
… and in a town that had a number of houses destroyed. They must be absolute sh!t.
Built on the old gang pad site and in a pretty good location but probably a bit noisey.
We stayed in an Air Bnb up the other end about a year ago. Definitely fairly noisy.
It looks like the garage takes up almost all the ground floor, so the actual living space is more like 100sqm. So they're asking nearly $1.5M for a 100sqm 2 bed townhouse with a big garage and views of either a hillside of houses, or train tracks and SH50. It also doesn't help the Homes midpoint estimate right there on the TM page is some $200K lower than the BEO price.
The same money puts you in a large 4-bedder in Havelock North, sans trains and trucks, and some even have lawns.
The Battery Rd townhouses mystify me, there's a lot of them going up and they're all fighting for what must be a very small pool of people. You don't generally move to Hawkes Bay to live like you're in Auckland or Wellington.
Yip, and when people say they want to live close to transport they don’t mean a port that is 1km away and operates 24/7.
More like 500m away.
Oh yes - 2 bedroom townhouse for $1.45M.
What could possibly be the reason they are not selling?
$1,450,000 - no wonder.
I see there's a new type of banking going on. It's house or apartment banking. Perhaps these are rented out so no need to sell until the sellers price is met or the developers/owners can financially cope with the situation.
No. Every single one of them is empty. The owners are believed to have borrowed the money.
But the owners do believe the market will miraculously go gang busters in December. ( even though interest rates are going up from here )
Holding on to False Hope.
Let me get this right: you are literally praying for the collapse of NZ's residential construction sector and tens of thousands of blue-collared workers losing their livelihoods with that. And yet, for some bizarre reason, those who don't agree you are the "doom and gloom merchants".
Why not, theses " ford ranger" Builders have bèen been creaming it for over a decade. Time for a re distribution of wealth. 😜
Yep, completions will fall away by the end of the year.
I don’t agree with a 2024 pick up - 2025 at the earliest.
Ever since you have been ramming home about t/h rentals auckland wide, heading to 400 and beyond, I have been keeping a track as well. Are you still adamant that will happen .... I thought you would be on the money, but now not so sure
Not sure what your point is. Yes I see a very steady addition of newbuild townhouses to the rental pool over coming months, before it starts dropping away.
Why do you think development will pick up in 2024?
You said it would surge higher didnt you. In the meantime, consent numbers are dropping and that has a two year lag. That could mean lower CCC issued until 2025 or 26
I will point out exactly what I have said rather than your interpretation of it:
- I said a couple of years ago that building consent approvals would start tanking. The tanking started a little later than I expected, early this year
- I have also acknowledged the lag. That completions would continue increasing after the tanking consent numbers started
- yes so completions will drop lower from later this year until probably 2026/2027 ( as per my comment above that things won’t start picking up in terms of building starts till at least 2025 at the earliest)
What does this mean? Rental supply will be supported in 2023. It will start falling away big time in late 2023/ early 2024. This will be an issue for the rental market and rental inflation if net migration remains significantly positive. It is not clear if that will be the case, as the NZ economy weakens.
Largely depends on the outcome of the election HM, if National/ACT get in expect mid 2024.
Why?
High interest rates are the main issue for the residential development sector, you expect them to be at least 2% lower by mid-2024?
Maybe it could happen if the economy really tanks. But then there will be other issues
Keep pumping them out - fantastic news! Another reason FHB's need not experience FOMO.
Is there any way of breaking down how many of these completed builds are pre-sold, vs those that are going to hit the market?
Good question. Usually greater than 50% of town houses are pre-sold, but it would be interesting to know exactly how many of those completed new builds are going to hit the market. In the past, investors would snap them up, but investor activity is low at present. I'm not sure how many FHBs would like to live in some of the town houses on offer.
Seeing a sprinkle of posts on FHB, Reddit and Investor pages where off the plan purchases are coming in under bank valuation or changes in circumstances. One person on Facebook foolishly agreed to a revaluation upwards at request of the developer during the build, and values have since retreated drastically, even identical properties listed on the developers are advertised considerably less than the contract rate but the developer won't budge.
Here's an "investor" that has seen a change in circumstances:
https://www.reddit.com/r/PersonalFinanceNZ/comments/15inmi7/advice_plea…
The entitlement of that investor thinking they should be able to get out of paying what they agreed AND keep their own home is kinda gross. Take some personal responsibility - sell your house and live in the investment property if you have to. Or just sell everything and rent.
Indeed. Boo whoo but did it to themselves. Todays young have a term that about covers it "get wrecked"...
Bet you they'd be the sort of landlord in an alternative universe that hikes the rent and tells the tenant to jog on if they can't afford it.
"It's just Business".
Good that there are so many new options to relocate to then from older dwellings.
Or more details of where they all are l.
Surge in buyers? Or is this a megan woods over supply catchup for the 100k of houses in 5 years spin.
Alot of these new builds on TM at great " specoal " prices this month!
Funny how the homeless numbers are rising proportionaly to the new builds.
🤫🤫🤫😑
Seeing a few listings for new builds that the purchaser has or will be unable to settle. Not sure if it is the purchaser or vendor in control of the listing. Think the number of listings will only increase as more people realize they can no longer settle.
Also seen a lot of ads for contracts for new developments - 5% deposit required. Would need to have rocks in your head to sign up to something like that in the current environment methinks.
That is because they no longer qualify for a mortgage at the current interest rates.
I went to Cosco for the first time on Friday, and I saw many, many new townhouses with for sale signs in Hobsonville. Lots of new supply, expensive and restrictive borrowing costs, cost of building up, value of houses down… can't and won't end up well !
I disagree. It will end up splendidly for first home buyers!
I imagine you come to your conclusion because you expect house prices to be cheaper, and I agree with you. But no house will be cheap enough for jobless FHB's to buy
Keep building, open up more land for homes, government should start building programs for renting at low rate flood the market up and down the country bringing down house prices and rent’s. Make it hard for speculators to make profits and give younger generations hope in being able buy own property older generations could buy a property on one wage, today two people on average wages cannot afford to buy a two bedroom home in many area’s.
Who is going to keep building if you have to sell at a loss ? Would you DTRH ?
He expects the gubbermint to pick up the tab for him by the looks of it.
At the moment the government are paying for rents, emergency housing,housing allowance up and down the country, many families are living week to week having to pay huge rent payments. This would all come down if the government started building projects not to make money but to provide cheap rentals homes.
that's not exactly the only things government is doing, they are also shaming and punishing landlords.
Nobody should build at loss but many are at the moment, land is huge part of costs we have abundant amount of land. The price on land from my experience has gone up 12 fold in last 20 years. Thats why government and councils need to get involved bring the housing market down if most of the population cannot afford to purchase a home from scratch you are going back to Victorian days when top 5% owned everything. I am not saying give housing away just make it affordable for young families to build future in New Zealand.
Nobody will build, then sales for GIB, framing timber, pink batts, land etc dry up. Eventually those who derive an income from housebuilding who also take the first bite of the profit margins might take a little less.
I count 13 decent-sized lots being cleared in my suburb with construction slated to begin after the west season. Young families these days are increasingly viewing townhouses as a step on the first rung that makes upsizing at a later stage an easy option.
Do you think those projects will go ahead?
I was curious to know, so asked around and did some online research over the weekend. Location seems to be the key consideration for buyers.
I literally counted hundreds of shoeboxes in crappy areas were still on the market months after completion but very few in good neighbourhoods sitting unsold on the market (even those off-plan).
by Advisor | 7th Aug 23, 12:15pm
Let me get this right: you are literally praying for the collapse of NZ's residential construction sector and tens of thousands of blue-collared workers losing their livelihoods with that. And yet, for some bizarre reason, those who don't agree you are the "doom and gloom merchants".
Is this developers rushing to complete builds and not get caught on the other side of the sunset clause that the less scrupulous had been exploiting when the market was hot?
Maybe there could be a tiny bit of that happening, but mostly it’s simply time for a surge of completions based on big consent numbers and building starts mid 2021-mid 2022 coming through. Also lots sold off the plans in that period when interest rates were much lower. Brace for carnage in terms of many not being able to settle…
Unsurprising - these are the projects that would have commenced during the very peak of the market. Sounds like a long time but remember EVERYTHING relating to resi construction was under pressure and taking way longer than usual.
- Land purchase/project scoping/funding - 2 months
- Consenting (RC/BC) - 9 months
- Site works - 1 month
- Construction - 10 months
Which winds us all the way back to late 2021.
Now watch those CCC numbers fall off a cliff as demand more or less stopped over the course of a few months once rates went up.
More stock arriving, less buyers meeting bank requirements, developers facing real haircuts or suing defaulting buyers, and banks holding off shooting the speculative caught standing holding the baby without a chair. The critical question is how long do the banks hold their trigger finger...?
Add in NZD closing in on having a "5" infront of it because the RBNZ is being pressured not to do the right thing. Something about an election over something fiscal integrity something Those that avoided Tony's advice and fixed long at 2.99 or low 3% will soldier on, and those with no mortgage will as well. Those leveraged up the wazoo on short term lending face the reality of being found standing holding a crush weight of debt as the music stops.
Who would give up the safety of their musical chair to the over leveraged right now...?
The banks have the ultimate tool to avoid having to use their trigger finger - Duration, aka "Extend and Pretend"
"I see, Mr X. You can't meet today's new mortgage rate at the roll-over rate of 28% and your house is now worth 1/4 the price you paid for it. But you and your wife still have jobs, so how about we extend that loan from its current 5 years left to run out to 50. There you go! Weekly payments are now just as affordable on your incomes as they were when you first came to see us 20 years ago. Good luck. Oh, and if you find that's still onerous, just drop in and see us at any time"
More and more "development" sites coming up for mortgagee sale each week. How many more developers are in distress. Incentive for the lenders to extend and pretend. But eventually they have to pull the pin.
I don't see many - yet anyway
If they are for sale they are quickly being snapped up.
Does 'new homes' also include units, apartments etc? IMO a house is just that, a standalone or attached house with it's own entry off it's own parcel of land, and I think that is how it is defined overseas.
Most peps live in apartments in developed countries. I used to, my sister, my mom, almost everybody I ever known in Europe.
Where you can sleep and cook, put furniture, sitck pictures on the wall, have a pet. That's home for me and for many.
I'm a hermit by nature. If I didn't have a family, give me a good quality small apartment in a good location any day. Somewhere I can sleep, eat, work and not have to catch a taxi to/from if I want to go out for drinks.
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