New dwellings are continuing to be built at a record rate in Auckland.
Auckland Council issued a record 1949 Code Compliance Certificates (CCCs) for new dwellings in October, surpassing September's record of 1927.
Both months were the first time the number of CCCs issued by the council for new dwellings in any month had passed 1800 since the council began compiling the figures in their current format 10 years ago.
CCCs are issued when a building is completed, making them the most reliable indicator of new housing supply, unlike building consents which are issued before building work commences, making them an indicator of future supply.
The current rate of completions is at a record high on both a monthly and rolling two month basis, with 17,558 CCCs issued for new dwellings in Auckland in the 12 months to November.
However building consents for new dwellings are in decline. The number of consents issued in Auckland in October was down 24% compared to October last year, which means new home completions will start declining at some stage.
The current record number of new home completions may be the result of fewer new building projects being started, which means builders have more resources available to focus on completing existing projects already underway.
So the currently high level of completions is probably at or near the crest of a wave of new residential building work.
It will be interesting to see if dwelling completions in the Auckland regions reach the benchmark of 2000 a month before the wave breaks and the tide of new construction work starts to retreat.
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36 Comments
It seems like there is always a jump before Christmas as people want to move into their new homes for the Christmas festivities. With consents dropping my 30% in some Auckland districts, That will be seen in the CCC figures in 12-24 months time because of lag. These new houses would have had their consents issued in the 2021-22 low interest bonanza.
Indeed ! This means that some of the construction workers who just finished these jobs will be finding it harder to move on to another job.
This is circa 50% of the people living in Wanaka paying mortgages.
There will be thousands of new jobs becoming available with the 90 day trials and the scrapping of the fair pay agreements according to our amazing new government.
Lots of apartments and townhouses must be finishing around town. Can eveyone actually settle will be the crux. There are already several partially complete blocks up for mortgagee which would indicate "no", or trigering of presale exit clauses.
Probably town houses and apartments. most of the people do not like that kind of living
also they're not cheap, 3 beds for 1.2M and the standard is low-average
re ... " most of the people do not like that kind of living"
Yeah. I would like a mansion with two swimming pools. But I guess I'll have to settle for what I can afford.
re ... " 3 beds for 1.2M and the standard is low-average".
A quick search for new townhouses and apartments with 3 bedrooms in Auckland (NZ's most expensive market) shows the median price to be around $890k. Nationally it's about $870 as Auckland makes up the bulk of new townhouses and apartments.
But I guess you'll say they're all in sh1thole suburbs ...
re ... " the standard is low-average".
Compared to what? Houses built 20 years ago? 40 years ago? Australian houses for the same value?
Let's assume average after-tax h'hold income is $120K and so you have a multiple of 7.4x for your townhouse.
And assume a long-term shelter to income ratio is 6x.
So you could say you're paying a 23% premium to live in such a great global metropolis like AK.
"So you could say you're paying a 23% premium to live in such a great global metropolis like AK. "
Can get this lifestyle with renting and at much cheaper cost (for an equivalent house, estimated to be $36,816 to rent vs $73,800 payment for 80% LVR on a 30 year P&I with rates, insurance, maintenance etc.)
Here is a house in Auckland near the median house price in Auckland currently for sale:
https://homes.co.nz/address/auckland/panmure/32-domain-road/QjbYx
Can keep saving the difference of renting over buying (this is almost $37,000 in year one) to increase their savings. Savings can be deposited in bank earning interest, thereby increasing the size of savings.
Every owner occupier buyer should do their own rent vs buy calculation - one of the key assumptions is the future house price growth.
I'm referring to North Shore.
Half are less than $1m.
Quick rough estimate: 119'000 new immigrants pa, 60% likely to stay in Auckland = 71'400 / 17'558 new dwellings pa = 4 people per dwelling. A little higher that the NZ average of about 3 per dwelling, but not that far out given many expect a higher density for immigrants living together.
Auckland has just about been matching the required increase in houses in the last 6 months if that is the case. It wont continue though.
I don't think the high immigration will continue either. Most need job offers to arrive, these are reducing by the day
I was trawling around the viaduct on Sunday. I really wouldnt want to be relying on my cooking and bar skills to make a living right now, I cant see how many of these businesses will survive. Some were completely empty at 1pm on a sunny Sunday.
New dwellings are continuing to be built at a record rate in Auckland.
Perhaps "New dwellings are continuing to be completed at a record rate in Auckland" would be more accurate, given the number of new construction started, has reduced considerably.
With job ads back to 2018 levels, many of those migrants will be returning soon..
Ps: relating to your comment above
Exactly. It's construction starts that matter rather than the lagging indicator of completions.
Like I (and others) have said ... The NPS-UD, MDRS, Councils re-zoning for higher densities, etc. has enabled a huge increase in potential supply ... About enough for 20-30 years, or more. Now we just need the RBNZ (and government!) to stop blocking further increases in actual supply by freeing up credit for more building.
I am pretty sure MDRS is on the long list of things to be reversed under urgency by the new government.
Replacement if not a priority though, that can happen later. Just urgent reversal of what is there currently, in this case a law they were the joint authors of. I would not be surprised if they declare they have wind back the other items on your list also as part of their getting the country back on track...
You'd be wrong. The new government is going to allow Councils to opt-out of the MDRS standards.
However, many Councils have already done the work to change zones for the MDRS. And many pearl-clutchers that were afraid of 3 stories next door are now more relaxed as infrastructure deficits means many areas can't be rezoned MDRS for some time and many areas have had special considerations applied. So there is a good chance the MDRS will be applied in most Councils although perhaps watered down a tad.
In Auckland, we have a zone that was created in 2016 that is already about the same as MDRS standards and one slightly less and they apply to about 60% of Auckland. (That's what caused Akl's flatline in house prices between 2016 and the RBNZ's covid madness in 2020.) Only a tiny fraction of this land has been developed and there is a lot left. The problem is though - we still need to get a damned resource consent from council and that costs, whereas under the MDRS no resource consent was needed.
In all - I expect Councils will probably keep the work already done for MDRS standards in some watered down fashion ... And keep the requirement for the damned resource consents - a thoroughly expensive and inefficient b.s. process ... and people wonder why house construction is so damn expensive?
The issue is construction costs. For a standalone house in Auckland it seems to be starting from around $5,000/sqm (excl land, incl gst).
It’s going to be really interesting to see where $/sqm trends in the next year or two.
Edit: Of the four people that I know built houses in the last 12 months, all are over capitalised. They all would have been better of just buying something.
I used to believe that capital gains were only realised through the land and not through the building. Now I am not so sure.
As a general rule, stick with your first thought.
I wonder if National will be able to get it moving again? They didn’t seem to have any decent housing policies, but they supposedly are the only party that can get anything built so I guess we’ll see. Of course it will all be in the outskirts with no infrastructure and they can join the motorway queues with no other option
The crux is not ccc
It is how many the builder will release at one go
The builders control this to keep prices up
Only way to reduce prices via flooding market is for gov to employ people and have own building Agency. Not done this I over 40 years. Gov doesn’t in fact want to flood market to improve affordability because it would cost loads of votes of those staking future asset wealth on prices rising 7% or more pa for ever
"The builders control this to keep prices up" Didn't realise there were so many developers or builders who could hang for any length of time, say > 1month. They must be pretty wealthy to fund the holding costs in today's interest climate
Kainga Ora buying developments in progress in selected suburbs and bailing out those developers and keeping prices up.
Here is a recent one: https://www.stuff.co.nz/national/133010628/the-campaign-to-stop-social-…
I hope that Kainga Ora is negotiating hard with developers so that they are using tax payer money efficiently.
Kainga Ora is in a strong bargaining position. If Kainga Ora was not buying the development, the alternative for the developer due to a shortage of cashflow and time constraint from lenders could be bankruptcy.
Can Taxes and Bonds Finance Government Spending? https://www.levyinstitute.org/publications/can-taxes-and-bonds-finance-…
Kainga Ora's time is limited.
Bill English will be under instructions from the powers behind National and ACT that Kainga Ora is to be sold off so National and ACT sponsors all get houses on the cheap.
"Only way to reduce prices via flooding market is for gov to employ people and have own building Agency. Not done this I over 40 years."
This is why Kiwibuild failed. When demand is higher than supply why would any private developer or building company choose kiwibuild (even if subsidized) when they can make more $$$ by selling in the open market.
Yup. The RBNZ throwing cheap money around certainly killed Kiwibuild as house prices shot up.
But as things go back to normal there's a good chance Kiwibuild will make some sense again.
OMG!! Not another government agency...puulease!!!
Hopefully the government will put money into building social housing as many people living in overcrowded housing or cars rents in Auckland and other areas are out of control. Only way out of this spiral is governments to provide affordable housing this will reduce cost for renters and more supply will cut house prices.
Is this the new National Act NZ First Government that you are referring to? They are only working for the private landlords and so they don't want more public housing.
Building lots of new apartments which look like they're going to be slums in 10 years time.
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