The year kicked off with a huge jump in the number of new homes completed in Auckland.
Auckland Council issued 1291 Code Compliance Certificates for new dwellings in January, up 34% on January last year. It's the highest number issued in the month of January since the Council began collating the numbers in 2013.
The figures were particularly surprising because January is usually the slowest month of the year for new dwelling completions.
Code Compliance Certificates are issued when a building is completed, so are the best indicator of actual new dwelling supply.
However, the surge of completions in January does not necessarily mean there has been a renewed surge in residential construction in the region.
The monthly figures can be volatile, particularly in Auckland where there are large numbers of multi-unit housing projects.
If one or two large multi-unit projects were completed in the same month it could inflate the figures temporarily.
The 12-month rolling average suggests new dwelling completions in Auckland are currently stabilising at about 1450 a month, after declining from a peak of around 1600 a month in the middle of last year.
So it is likely the jump in completions in January was just a blip in the numbers rather than the start of a rising trend.
The graph below shows the monthly trend since January 2019.
2 Comments
I'd hazard a guess that there's becoming an overhang of houses in Auckland. So this would conceptionelly turn directly into an overhang of labour as the new builds are signed off. Regional drift will persist as retiree's with a lack of savings have to release equity in their more expensive houses ( in Auckland) to provide for their retirement. It's not a win as then health resources are squeezed in these retirement regions however that's another story. Most immediate problem is that labour oversupply persists and like a rolling maul this weighs on future economic activity, jobs etc. 5% mortgage rates aren't going to arrest this move. I'm still reasonably bearish on NZ's economy over the near future. Find it hard to reconcile the economists forecasts, sometimes I think being on the 18th floor of a harbourside building with no job insecurity may distort their vision of what's really happening out there.
Interesting issues. I think the drift from Auckland is greater than the retirees - it is also a lot of industry that never belonged there but remained because of various Government pricing incentives. I agree the oversupply of housing is continuing - and these figures suggest the tap hasn't been turned off. And much of that labour may look at speculative builds as land prices fall.
Let's remember also - that over 50% of the completions will have been sold off the plan, often to first home buyers. So they are houses that haven't been listed in the real estate sites. However, those houses they leave will now be available to lease, from landlords who will be competing to find tenants for the first time for a while. That is the joy of additional supply - it is not churn like the houses in the market that part of an on-going upgrade chain.
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