A record number of new homes were completed in Auckland in September.
The latest figures from Auckland Council show it issued 1927 Code Compliance Certificates (CCCs) for new dwellings in September. That's the highest number in any month since it began collating the figures in their current format at the beginning of 2010 when eight councils were combined to form Auckland's "supercity" council.
CCCs are issued when a building is completed, making them the most reliable indicator of new housing supply.
The previous monthly record was 1742 CCCs issued in June this year. (see graph below).
The latest monthly figure also pushed the number of dwellings completed in Auckland over the year to September to a record annual high of 16,769, the first time it has ever been above 16,000 in any 12 month period.
The record number of dwellings being completed in Auckland stands in sharp contrast to residential building consents for the region, which were down 22% in the 12 months to September compared to the previous 12 months.
However it generally takes around two years from the time a building consent is issued for a residential project until it is completed and a CCC is issued, so the current record rate of completions is a result of the large amount of residential building work in the construction pipeline.
At some stage the downturn in new dwelling consents will start to bite into residential construction activity in Auckland, as more existing projects are completed and fewer new projects get underway.
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50 Comments
More stock arriving at settlement completion. Should have pre-sales locked in. Hopefully they still qualify for lending pre approvals. If not...then how does the bank get their money back...?
"how does the bank get their money back...?"
A couple of recent completions in Takapuna. 47 residential dwellings in total.
1) 14 terraced houses
https://www.bayleys.co.nz/listings/residential/auckland/north-shore/42-…
2) 33 apartments
https://bnn.network/finance-nav/aucklands-apartment-market-in-distress-…
Exactly. Will 2024 be the year of mortgage sales.
Heard that several development projects where developers have had difficulty selling the units are being bought by Kainga Ora - in effect bailing out the developer from a potential mortgagee sale and reducing the potential downward impact on house prices in those areas.
Here are some in Auckland
1) https://www.stuff.co.nz/national/133010628/the-campaign-to-stop-social-…
2) https://www.stuff.co.nz/life-style/homed/real-estate/119475287/firsthom…
3) https://www.nzherald.co.nz/nz/new-kainga-ora-deal-to-triple-te-kauwhata…
4) https://www.nzherald.co.nz/nz/kainga-oras-social-housing-development-on…
I don't think the owners of residential dwellings in Takapuna (or other high socio economic neighbourhoods) want social housing in their neighbourhood.
Reading that Stuff article sure is an eye-opener. One of the locals actually says "its not my problem" which is exactly the sort of attitude that leads to social problems.
It is everyone's problem.
The irony is that nothing will make prices fall as fast as a block of townhouses turning into KO housing. The other owners would be better off with a mortgagee sale lowering prices in the short term but able to rise in the long term, as opposed to the destruction in value as the block becomes a drug infested social housing ghetto. Of course, the developer doesnt care, he/she/they get to ride off into the sunset with their money.
My feeling is that the rate of completions will continue. All these homes have been pre-sold eighteen months ago (when you could get pre-sales). That will be people moving out of rentals into new homes. I think there looks to be a large number of building consents issued where the start was delayed, and they are still out there.
We get tied up with the fall from prices two years ago - but when people bought the land and planned the development the prices were about where they are now. Their options are to sell the land at a loss or build now. I suspect a lot will keep building and the fall in building consents issued is a reduction in the massive pool of consents out there that haven't been built.
You can still get presales. Just saw a good looking development in Jafaland hit threshold to push the go button
Not everything that has been consented will ever be built. Here's 2 in Christchurch that have been terminated.
Williams Corp, was going to be 274 townhouses - https://www.thepress.co.nz/nz-news/350107081/developer-keen-sell-site-m…
Mike Greer, was going to be 61 townhouses - https://www.colliers.co.nz/en-nz/properties/stunning-merivale-developme…
Yes as predicted the completions still very high. While the consents have slumped, the slump in completions will be a 2024 story.
good news right now for the renters. TradeMe listings of townhouses for rent is booming.
What happens when the pipes fail in those houses with concrete slab bases?
Ever heard of a concrete saw?
Sure but that is a PITA compared to crawling under the house.
And what if the leak is in an awkward place?
Uh, you wanted to know how they fix it, so I told you.
Piles and sagging walls/floors, rats under the house etc are also a PITA, choose your poison when you decide to build a house.
Actually my question was more to do with the consequences rather than how to fix it...
Copper pipes rarely fail in concrete, because concrete is alkaline, so no-corrosive. Plumbing has been cast in concrete floors for decades,
Rarely fail....and when they do?
What about plastic ones?
(As you can probably tell i know next to nothing about construction, but those concrete slabs seem like a nightmare in waiting to me. Although i do know that alkaline environments can be corrosive too)
99.9% of homes built in the country I came from are concrete. I remember when I arrived in NZ and was shocked to find houses made mainly of timber. Even piggies know houses made of brick are better than houses made of sticks.
The piggies probably don't live in an earthquake zone. Concrete slabs and bricks fare the worse when it's shaky.
I had quite a "discussion " with my insurance company following the Christchurch earthquake about a new brick cladding. They said it couldn't be done. Once I had forced them to acknowledge that bricks could be used (but cost more due to the extra foundations required) they were much easier to deal with.
I went with lightweight cladding because there will be another earthquake one day.
More like m- what will happen when it next floods. Lots of slab houses are still being built at ground level (all around many built 40-50 years ago raised up 1m or more). Case in point Clevedon and Mangere in Auck. Brave to be doing that in 2023.
Australia has been building with concrete slabs for 60 odd years - (excluding the current fletchers debacle) this hasn't been an issue for most home builders or owners in Aussie. Concrete slabs are not a new phenomenon
Ikimpaul Aussie dosnt have earthquakes for starters also they have termites although alot of Aussies want the big old queenslanders that are on stumps (piles) because they are way cooler. And also high up when they have there floods
The concrete encases the pipe and normally acts as another membrane so any ‘leaking pipe’ is largely contained.
There are plenty of pregnant developers in their 2nd and 3rd trimesters. They have no choice now but to deliver. But who will be left holding the baby?
Nice
Oranga Tamariki's cousin, Kianga Ora.
Its a shame that Kainga Ora havent adopted the "No Uplift" policy as well.
Quote of the month.
However it generally takes around two years from the time a building consent is issued for a residential project until it is completed and a CCC is issued
By the time the consent is issued, the tender process should also be done, so it's mostly two years for the construction ! That's shockingly slow. When I used to practice, we counted 6 months for a simple dwelling on flat land to 12 months for a complex design on the hill for overall construction time. Of course the building consent has become a lot more complex from 12 years ago, so has the box ticking process.
The last year or so industry seems to have become constipated. Dunno about the construction trade, but last week it took me a week to be able to purchase an off the shelf electronic module from the NZ distributor of a well known brand, and its not like we haven't dealt with them before. It should have been one quick email to confirm the price hadn't changed in the last few months since we last purchased a couple, a PO and an invoice and the goods ready to be picked up the next day.
We're lucky if we can get quotes back for standard items in less than 2 days instead of same day as it used to be from many of our suppliers.
I wonder how much of these delays are connected to the lockdowns, work from home and the general "be kind and relax" mentality ?
I think it’s a factor. My observation - without any scientific evidence! - is that people are generally flatter, less motivated and less driven post-lockdown experience. And I count myself in that category, to a certain extent.
She's a sweet time to be even half motivated, that's for sure.
Have a client who has been trying to get a granny flat consent on her farm for the last two years. The hold up is apparently because a boggy patch in the paddock has been classed as a protected wetland. Granny is now dead and she is wondering if she should bother continuing. 90k in consent and consultant fees thus far.
So you have record supply coming on line when cost of build is also at record highs which I would assume means asking prices are elevated. And this is when banks are testing at 9-9.5%.
Pipeline is dropping so demand for labour will decline for every finished project.
Unemployment is rising
Retail is struggling so downward price pressure is apparent within the goods sector.
Hospitality appears to be very much hoping for a good Christmas break to keep the wolves from the door.
Funding costs for households rise on average every day as fixed rate mortgages continue to roll off.
The fiscal pulse will decline once our clandestine tri-party experiment takes form.
Record current account deficit.
Agriculture is in deep recession.
But, what, high immigration will keep interest rates high until - 2025?
I'll call nonsense on that one. Mid 2024.
You forgot the new Govt taking a pruning tool to the Govt employment bloat and consulting.
They'll sack people, things will start falling apart, and they'll be rehired as consultants.
Time will tell. At the rate the exiting Govt wasted money on consultants, its a wonder that anyone was left employed by the Govt.
The people who they sack are the ones who hire the consultants. They do not want to be accountable, so consultants are the easy out.
Employee people who have the skills and apply them.
They just need to sack everyone who was hired under the Labour Govt. Like a rollback of a software update that didnt work. Lets just rollback to 2017 when everything still worked.
"The fiscal pulse will decline once our clandestine tri-party experiment takes form."
"Funding costs for households rise on average every day as fixed rate mortgages continue to roll off."
Key question is what will the banks do with cashflow stressed borrowers?
At the moment, hearing that they are giving borrowers time and reducing cashflow stress via
1) going from P&I to interest only
2) extending the maturity date of the mortgage.
If the banks take a different approach, then this could impact the housing market.
There will be a proportion of borrowers who will be in situations that the banks are unable to assist and may give the borrower a deadline to sell the property. If there is a high proportion of these borrowers, then this could impact the housing market.
You've summed it up well. The numbers are not looking good for next year in almost all facets of the economy. Immigrants and tourists will be our saviors apparently. So much so that we'll need more rate hikes.
The sky is blue.
Completions might be hitting a high, but it's the quality that counts. A lot of these properties are being built by cheap, imported labour.....no thanks.
Anyone remember the 1980's leaking house crisis?
That was bad design and bad materials.
And generally, a migrant site worker is going to get a good 50% more done over the same period than a kiwi. 100% attendance for a start.
We definitely seem to be in the good times and weak men phase of societal trajectory.
I live in a house in a fairly new subdivision that was built by genuine kiwi builders.
They weren't cheap, but the final result was worth the price. The builders had a look at some of the other houses that were being built nearby by imported labour, and told me the quality wasn't good and the walls weren't square. On another house they said some fixings were missing under the eaves. I asked them if the building inspector would fault the build, and they said no, they only want to see what's on the plans.
I've got a relative who's a builder and asked him if the building inspector would care if the walls weren't square, and he said no.
I'm seeing kiwis with lasers incapable of building things square. We used to make things more straight just using string and a weight.
With many things you get what you pay for, and the vast majority of new homes are having the bare minimum of oversight put into them, and what there is just isn't as experienced and competent as what it once was.
I'd suspect the attitude and standards of the person paying the imported labour is more the problem than the ability of the labour itself. 'Get it done quick' they'll be told, so thats what they'll do.
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