Record numbers of new homes continue to be built and completed in Auckland, in spite of the recent downturn in building consents in the region.
The latest figures from Auckland Council show 1583 new dwellings received Code Compliance Certificates (CCCs) during February, a record for the month of February, and up a whopping 36% compared to February last year.
CCCs are issued when a building is completed and are therefore the best measure of new housing supply, while building consents are usually issued before construction starts and give an indication of likely future housing supply.
On average it usually takes around two years from the time a residential building consent is issued until the building is completed and the CCC is issued.
The number of dwellings consented nationally was down by almost a quarter in the 12 months to February 2024 compared to the previous year. However, the latest Auckland Council figures suggest the slowdown in new projects being consented is yet to slow the supply of new homes being completed in the Auckland market.
That's because the number of completions reflects the high number of projects already underway in Auckland when consents started slowing, and possibly also a backlog of residential building work which is slowly being cleared.
While the number of new homes being completed in Auckland will inevitably start to slow at some stage as fewer new projects get underway, for the moment the supply looks strong, with 18,642 new dwellings receiving their CCCs in the year to February. That's a record for any 12 month period, and the monthly average is also sitting at an all time high of 1554 a month.
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77 Comments
Boom, record completions and now many thousands unsold both new and old crusty housing units (20x stale, unsold new units within 5 mins walk of me alone, Auck) aplenty.
Record unsolds and mounting, meets Flacid and falling buyers droop and DDDedt holding capacity in the sheiser.....what could go wrong????
Complete cluster collapse to resume.
IRELAND 2.0
NZ filling the housing shortage - a self created shortage as we have decided those who don't feel up to working can have a new home and and income package regardless of effort.
Meanwhile others striving to get ahead by working hard, saving, going without and trying their hardest look up and think...wtf am I doing this for?
Recipe for social and economic disaster.
Do we actually have a housing shortage, or is it more of a housing distribution/ownership problem?
(more so a warped taxation / finance system that drives it?)
Mum and dad landlords own more than a third of property
"More than a third of property in New Zealand is owned by mum and dad landlords, new analysis of housing records shows.
Another sixth is owned by professional investors - those that have more than 20 properties to their name."
What? Our state provisions of housing are far below what was given to today's older generations. (Who we now also fund a universal benefit for.)
Society had two chances to change the current inadequate and insufficient superannuation. Once in the 1970s when Bill Rowling proposed a new savings approach and again in the 90s when Winston Peters proposed a new savings system. Both opportunities were voted down by parliament and the workers of the day told not to worry the universal super is ok and will be there for you. So suck it up RickStraus, the present recipients of Super are the ones given that assurance all those years ago, long before Kiwisaver was introduced.
They’re also the ones who voted down a useful way of funding it.
Can't have your cake and eat it too, sometime someone has to pay the piper. But hey, 30 years of deferred infrastructure spending as voted by those wanting low rate increases while enjoying the seemingly never ending capital gains paid off for those on the pension now and soon to enter into it. Now that we all have to pay for the dilapidated infrastucture, I wonder how they'll enjoy the rates bill hikes. Oh right, the govt will step in there.....
Then they also cut taxes on themselves while cutting provision for the young.
Best of both worlds, really. Live off preceding and succeeding generations while cutting the equivalent for those who follow.
It's not actually the presence of universal welfare that's the problem. It's the selfish unwillingness to provide reciprocity. See above discussion of housing while also expecting handouts to protect their own housing wealth at any turn.
As I recall the Winston Peter's scheme had significant flaws. The referendum vote was on the detail of that specific scheme, not on the concept of a public super scheme.
Yeah but many living in state housing are in a better dwelling than many working people, e.g. the many young professional renters living in Wellington s&itboxes along with a bunch of strangers, pretending it's fun.
I do look at all the KO announcements of their flash new developments and think "why would people bother working these days?". The average family on a benefit earns more than the median wage, and they get given a brand new home as well, one that they would have no hope of affording to buy even if they did go get a job. Its the workers who struggle on, paying high private rents, trying to save for a deposit, to buy an old rundown property that needs work. No flash homes in the best suburbs for those workers, so why bother?
Public housing shouldnt be flash, certainly not 6 star like KO is boasting about building. They should be a bit crap, in order to discourage people from wanting public housing, or to move out of it as quickly as possible instead of staying put for life. When you give them the best for doing nothing, what incentive do they have to go better themselves?
While I understand the sentiment, I'd add the proviso that KO houses should be capable of heating and keeping dry without too much expense. Unhealthy living conditions will just spill the cost into Healthcare and other assorted social consequences.
Yes exactly- keeping KO residents and particularly their kids warm and healthy saves huge amounts in healthcare and other costs downstream
Agree with both of you. Social housing should be compromised on size but not warmth. A single person in social housing shouldn't need more than 30m2. Insulated and heatpumped.
30m2 is uncomfortably small.
Many councils insist on ~35m2 for studios (which are difficult to live in with lounge and bedroom combined) and ~45m2 for a 1 bed apartment.
Oddly though, a 35m2 (or a tad bigger) single bedroom works just as well if the shape is right (squarish) as a 45m2 one. How well either work at this size is mostly related to the shape, i.e. squarish so there's big windows that 'extend' the space, i.e. a ~6 meter square. The problem for many developers / architects is that they need to maximise window walls while squeezing in as many apartments as possible (making the apartments cheaper for buyers and spreading shared costs) so rectangles with the short wall at the window becomes the more efficient layout.
There's no one size / one shape that fits all needs. Each to their own.
The caring alternative is for the sate to build heaps more good quality houses available to everyone to rent for as long as they want.
The state house system as practised by the first Labour Government.
Pay low rent back to the govt using money handed out by the govt
The govt builds the house then pays the tenant, that works
Can you provide the data to justify your absurd claim that the average family on a benefit earns more than the median wage?
Because on the face if it that is an absurdly incorrect statement given actual benefit levels.
From the Govt itself. A report that looked at beneficiaries income - a 2 parent family with 2 kids gets almost $1200 a week on the benefit, and a single parent with 2 children gets $1000 a week. Whilst the median wage is $848 a week. That was 2022 numbers as well, probably even higher now.
https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-r…
Perhaps you missed the 45% increase in benefits under the last 6 years of Labour. Why do you think beneficiary numbers have exploded during a period of record low unemployment?
2024 median wage is 1186 pw according to stats nz. Wff for 2 child 2 parents, 148 wff a week according to ird table.
KW - that is simply not true. Benefits are deliberately set lower than wages. And workers with families also get government benefits like the working for families tax credit.
It is true. See the MSD report on beneficiary income. I dont know how much the WFF tax credit is but would it close the $300 a week gap between a worker and beneficiary?
I hope all the people here who are shocked by this realisation now wake up and see what damage Labour did to this country. They have entrenched intergenerational welfare dependency by encouraging people to go on, and stay on, welfare benefits instead of working. The new Govt have a hard road ahead to reverse this.
It's not only the last Labour government. For as long as I can remember there's always been a culture of welfare dependency regardless of who's in government.
The problem is that the long term unemployed are unemployable and the government continues to pay these households to remain that way. The more helpless you are, the more support you get.
Any slight hint of motivation and that's when they start to cut you off. Totally backward approach but all governments do it to one degree or another.
Is there evidence for the intergenerational dependency view?
Makes sense that improved outcomes for children is a worthy reason for a strong welfare system.. ie a long term investment.
Why must we punch down?
Yep - case in point. We own an investment property that has a 1/2 share cross lease with a KO owned dwelling. We thought we would approach them first prior to going to market as it made sense for KO to own both houses on the site only to be told “KO only buys new houses”. Really - no wonder they have blown billions of dollars!
Maybe Served as a good incentive for investors to keep building new houses (productive) rather than snatch up all the older existing ones (not productive, hurts young FHB) to then try and sell off to KO
How many of those who purchased OTP 2 years ago ever intended to settle and occupy those homes, as opposed to flipping them as soon as the CCC is issued? I suspect not many, and of those that did, they are going to be rethinking that decision now that mortgage rates are 7%. #getpopcorn
Bet me to it. Ouch
Looses $131,000 (circa 16%) in value in two years from purchase to settlement.
And you are paying double the interest on the debt as thought, plus having to put in extra equity for the larger deposit requirements required for finance, if you can get it, which unfortunately the purchaser for this property could not get.
Classic, which applies to all of the other 64 purchasers who bought in that development.
I had family visiting last week from Australia and they booked an Airbnb in a nice suburb.
I was shocked to find this brand new townhouse (the ready-lawn hadn't even started to grow!) along with the other 7 were all on Airbnb.
So, were they all on the market at some point and didn't sell or built for Airbnb?
Or are on the market but are currently being used as AirBnB in the meantime. Williams Corp in Christchurch are doing this with all their unsold stock.
Not really, new builds from here are going off a cliff and we still have people pouring in to the country looking for somewhere to live. Record numbers starting to come from India, give it a month or two and the headlines will change to housing shortage in Auckland again.
How about a line graph showing over time, consents, Code of Compliance, listing, and sales in the one graph?
Yes indeed 😊
I do like those red bricks
They've done it wrong. Everyone knows that black goes with red brick these days, not white or grey.
Well black is the new er, "black".
Not sure that painting that gable black would work. Everything black above the brickwork means that the definition between the roof and gable would be lost. Complimentary color green? Maybe not. Compromise, grey perhaps. Still very on trend.
It mystifies me why so many people paint their houses to look like navy frigates. Ugly as.
This is how its done these days. Black modernises the red brick. It also looks great on 1950's red brick and tile houses.
https://harcourts.net/nz/office/ilam-2/listing/im25366-81c-browns-road-…
My next door neighbor is building a home. The cladding is a mixture of glossy black colour steel and recycled weathered red brick. I thought he was mad. But the end result with the contrast between old and new looks seriously classy.
Some of the blacks I see being used are going to look awful as time goes by without constant upkeep.
Once black fades it doesn't tend to look as good. If you're buying into this fashion, check carefully what materials are being used to achieve the black-look and factor in the maintenance schedule, and be aware that how much sunlight the face may get means your schedule may be too optimistic.
(And be aware that the neighbors with near identical color schemes using the same materials may not be able to afford (or want too) to keep their properties looking smart. LLs - looking at you!)
Yes. “New Black” and “Old Black” are two vary different colours.
one creates contrast, the other looks tired.
The best way to pick cladding and colours is to drive through a 5 year old subdivision.
True. But white also gets dirty and needs cleaning, while black doesnt. So both colour schemes would probably look crap if not looked after. I think all those cheap townhouses sold without body corporates are going to have issues down the track with exterior maintenance - as absentee investors and those renting to Kainga Ora wont be very motivated to keep the property looking nice.
Whites & lights wash easily & cheaply while 'fading' much more slowly. (And some lights look good while they're fading. Not so many blacks. So chalk and cheese.
(Not going to comment on your ongoing attacks on townhouses. Or KO. But will confirm that in my street - and its surrounds - it is the land-bwanking LL owned properties bringing down the tone. Not all. But far too many.)
Thats a 36% increase in the number of people who are now asking the banks to give them a 7% mortgage on a property that is probably worth less than what they signed up for 2 years ago.
Highest interest rates in 18 years, high debt levels, record number of new houses built, sharply rising stock levels… and prices still not dropping. Unbelievable !
and they're still not selling. Unbelievable !
You sure about that? I think REINZ latest data showed there were 35% more sales than the same month a year ago.
What happened this time last year? REINZ can remind you - “the impact of extreme and devastating weather over the start of 2023 is certainly showing in the data with sales and listings significantly down in affected areas”
by Yvil | 13th Feb 23, 5:16pm
What storm?
https://www.interest.co.nz/business/119635/review-things-you-need-know-…
All true, Evil.
Sometimes the word "resilient" is used with regard to the housing market.......
Whenever the word is used, however, the DGM become obstreperous.
TTP
And, lest we forget, sometimes the words Anti-competitive conduct are used to describe con men Timmy https://shorturl.at/cjkPY
by tothepoint | 12th Apr 24, 10:24pm 1712917495
All true, Evil.
Sometimes the word "resilient" is used with regard to the housing market.......
Whenever the word is used, however, the DGM become obstreperous.
TTP
🤣😂
There are many evils in this world, who have proven to be beyond contempt:
Dictators, Warlords and Terrorists........NZs equivalent are the filthy Roosters masquerading as respectable and law abiding REAs at the Property Bonkers.
The potentially good people working there......beware of the old adage of "laying with dogs and getting the awful fleas"
Construction unemployment explosion incoming
I bet most of the tradies facing joblessness in the short-term would have enough stashed away from cash jobs to buy a one-way ticket to Australia.
All those earning 80-150k will simply relocate to greener pastures leaving this country more stretched for skilled resources when the construction pendulum swings to boom again.
This 100%.
We have lost a dozen staff over the last 6-12 months who were great at their jobs, however were sick of being in a holding pattern or being moved around sites with no consistency.
Now we have more work than ever coming online and will need to hire fresh or under skilled workers that will need to be promoted above their skill levels immediately, leading to more head aches.
Its mid 2020 all over again.
And all thanks to how the RBNZ chooses to solve the inflation problem that they played a large part in making.
Fortunately Australia is still screaming for construction workers as they ramp up infrastructure spending, and QLD prepares for the Olympics. Also fortunate that Australia is handing out citizenship to all Kiwis so no problems taking the parents and kids over as well.
https://www.stuff.co.nz/nz-news/350243626/woman-loses-200000-after-fail…
There will be plenty more of these scenarios to play out. Welcome to the school of hard knocks
If we say that average monthly building or dwelling completions in Auckland in last 10 years is 1000 pcm then in that tie the total stock has been increased by 120000. Can this please be factored in to comparisons which refer to sales pcm please?
That is comparing sales with earlier years is not legitimate or meaningful unless the commentator refers to the total stock and hence we can convert to a % to accurately compare. Instead we are frequently told sales are up or down compared to previous year when clearly the stock has gone up 12000 in that year, so one would expect sales to rise
Brown smelly stuff about to hit whirling metal blades.
Inventory of new builds for sale is building, as are townhouses for rent on TradeMe.
Great news for renters and rental inflation, terrible news for developers.
The rental issues, in Auckland at least, will have disappeared by the end of this year, with this boom in supply, and the economy going down the toilet (and net migration easing). But the crisis will be back in 2-3 years once we have experienced profound underbuilding as the development sector slumps further.
You would be taking a grave financial risk buying into some of these Coronation Street developments.
Some are truly awful. And the rumour is they're not selling.
It depends so much on the area. Townhouse an hour commute away in motorway rush hour? No thanks. 20 min bus/train/bike into town, hell yes! You need good parks amenities and shops around to live well in townhouses. These ones are very smart.
I agree. The trouble is, the townhouses in my area that have those advantages are listed for $1.2m.
The three rules of property, ay. Can't get past them.
"And the rumour is they're not selling."
The rumor is wrong. Most are selling because most were pre-sold. But, like always, the three rules of property apply and if the location is awful then these aren't selling that well.
If a FHB buyer (or downsizer) can't get their head around living in an apartment (for much less) then these are the next best option (for quite a bit more). Each to their own. Snobbery needs to be eliminated and cold hard financial wisdom must come to the fore.
Ah, but if they were presold to people who had no intention of keeping the property once built, are they really sold? Was given a presentation by a developer the other day, who pointed out all the apartments that had been bought by people who worked for the developer. I'm betting they have "bought" them in order for the company to get to the presold level that will allow them to get financing to build them, but will quietly release those buyers come settlement time (or delay settlement to allow the buyer to on sell the property first).
"I'm betting " = a reckons
Correct, that is why banks discount the value of developments sold like this and don't accept the pre-sales as the true market value until it has been on-sold through a third party by standard RE marketing methods.
As was shown by a recent resale by a developer of a property that the original buyer could not settle on. This figure was 16% less than the off-the-plan sold price.
"You would be taking a grave financial risk buying into some of these Coronation Street developments.
Some are truly awful. And the rumour is they're not selling."
Scared of the competition for your flood plain wop wops section wingman?
.
OPES, Propeller and Positive Real Estate, Williams Corp and [insert investor focused developer here] sold hundreds, if not thousands of properties off the plans in 2021 as investors piled in.
Costs went up 25% and interest rates 300%. Many of those same investors who can't make their payments now are trying to offload townhouses without carparks for a chunky financial loss, while running large annual losses and are finding there are no buyers.
They are usually sold with predictions of 5-7% capital growth in their "projections", making the loss appear not as bad. One pitch I reach fudged things even more by saying the growth would net the cashflow loss to a positive figure, in a mythical "wealth number".
None of this is regulated. If it was shares or some other fund the FMA would slaughter them. There needs to be some regulation of what a developer is allowed to project in a sales brochure.
There is one down the road from me, listed earlier this year for $749k on completion of the build (1 of 6). Now listed for $699k. Better quality than the ones in the same area that sold in 2022 for $725k (block of 7). Another townhouse across the road (block of 4) sold in 2022 for $989k then resold a year later for $891k. There is still a lot of price devaluation to come as the interest deductibility premium is removed, and they all start selling for the same prices as those built pre 2021. Maybe even less, as the slightly older townhouses are bigger, have garages, backyards, and less neighbours - because they were built before developers got greedy and started building cheap and nasty to maximise their profits rather than their buyers amenity.
Correct, if you find a townhouse with a double garage (wide) then buy it. It’s a very inefficient way to build them (6m width).
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