Building consents for new houses including apartments fell sharply in March, down a seasonally adjusted 9.1%, according to Statistics New Zealand.
This followed a seasonally adjusted 4.4% gain in February.
Excluding the highly variable apartment consents, the seasonally adjusted total for new houses in March was down 3.1%.
There were only 16 new apartments approved during March, the the lowest monthly number of apartments since February 2010, although numbers continue to vary a lot from month to month, said Statistics New Zealand's industry and labour statistics manager Blair Cardno.
“If we look at the long-term picture, the trend for new house numbers has been positive for two years,” said Mr Cardno, “but the rate of growth has slowed in recent months.”
Westpac senior economist Michael Gordon said the sharp fall in March consents was the result of two factors: a fall in the volatile apartments component to rock-bottom levels, and one less working day than usual for March due to the timing of the Easter holidays.
"Both of these factors point to a sharp rebound in the April figures, so today's figures don't challenge our forecast of a further upward trend in consents over the next couple of years," he said.
The apartments component of the figures can't suffer a further sharp decline, Gordon said, "and indeed has plenty of room to bounce, so we suspect it will be a strong positive factor for the April total".
"The second factor was that Good Friday fell in March this year, meaning one less working day than usual. This happens fairly infrequently, and we find that seasonal adjustment programs tend to struggle with moving holidays. (Our attempt to capture the Easter effect suggests an adjusted 1.5% increase in ex-apartment consents for the month.) The flipside of this is one more working day than usual in April this year, which will boost the number of consents by a similar magnitude."
The latest figures from Statistics NZ showed there was a substantial fall in the number of new dwellings consented for the Auckland area. The number fell by 118 compared with March 2012 to 393. However, there were no apartments consented in March this year, compared with 104 at the same time a year ago, thus making up most of the difference.
But Auckland has been leading the country's house prices higher, due largely to a perceived shortage of housing following a big drop in construction over the past few years.
ASB economist Christina Leung said the overall building consent figures for March were "fairly weak", even after taking into account the volatile nature of this monthly series.
"While rebuilding in Canterbury is continuing to underpin construction demand, the trend improvement in house-building demand in the rest of NZ appears to be slowing. This will put additional pressure on the housing market, particularly in Auckland. We do caution that the early occurrence of Easter this year could have impacted the results."
Monthly changes in the seasonally adjusted number can be volatile, partly as apartment numbers rise and fall.
However, new housing consents continued to rise in Canterbury, reaching 444 in March 2013.
“Across the Canterbury region, the number of new houses consented reached a six-year high,” Cardno said.
“Both Waimakariri and Selwyn districts each broke records with their highest monthly totals since the series began in April 1990.”
Housing consent numbers for March 2013, compared with March 2012, were: 1475 new houses, including apartments (down 5.4%) 1459 new houses, excluding apartments (up 4.7%) 16 apartments (down 149 from 165).
Earthquake-related building consents in Canterbury were estimated at NZ$51 million, including 57 new houses.
Non-residential building consents were valued at NZ$365 million in March 2013, 20% higher than in March 2012. This was boosted by work on prisons in the Auckland region. Data for building consents is obtained from all territorial authorities in New Zealand.
Building consents - residential
Select chart tabs
17 Comments
"seasonally adjusted" ha
Punters and peasants alike have opted to buy old and tart em up..that way savings can be made by avoiding the red tape nightmare...you can replace your own roofing without having to hand over thousands on scaffolding...and more on a consent...
Whatever...the banks know they own the market having suckered successive idiots in the Beehive into running a credit bloated economy...fat bank profits
No escape now...it's credit or die
Well done that polly...three cheers for the idiots we elected to ruin the place.
Indeed, Wol, it's amazing what one can do with a sturdy articulated ladder, a head for heights, and favours traded amongst neighbours. Particularly if one has drainlayers, concrete guys, contractors, engineers as said neighbours.....
In fact, I may have even predicted something like this, oh, years ago....
Anaemic numbers yet again.
Great graphs, you can see how bad things are in the residential construction sector if you scroll it back to 2007. NZ is building about half the houses required and these include the rebuild of NZ second biggest city.
Capabilities have been lost across the industry,NZ Sparkies ,nz Plumbers, nz carpenters, plasterers, glassiers, builders all now building everyday in Australia.
Can only imagine if the banking sector halved, they sky would be falling, Government gaurantees needed.
Building materials annual increase just around the corner, tin, wood, concrete, wire, pipes , Glass all going up, wages going up, regulatory increases as well.
How does anyone think residential construction is going to get cheaper, if every component is increasing in price?
Old homes are valued the same as a new one $XXXXX per square metre.
and again record number of young aspirational Kiwis leaving for Australia and the opportunity of Home Ownership.
No first home owners grant here in NZ, No Builders Boost, how can you compete with Oz if you dont offer the same assistance.
Australia has a Film Rebate incentive and so does NZ, the emulation must stop there as the incentives and assistance packages for Building Affordable Homes dont make it down the list to Housing the Populous.
If NZ wants to close the Gap, then at least adopt a few Australian policies around Affordable Housing Construction......or not?
Hugh,
I only follow a few of your postings, so easily could have missed some important points, but am intrigued that you seem to be resisting growth in relatively distant Waimakariri and Selwyn. I thought you had a somewhat laissez faire approach to planning, (as per Houston?) and if people want to live miles out of town, why stop them. I understand frustration with Christchurch approvals, and if the primary reason people want to spread is purely because they cannot get approvals in Christchurch, even though there is plenty of suitable quake resistant land there to build on, (I live in Auckland, so don't actually understand whether that is the case or not), then I get that would be frustrating indeed.
As it happens I am not at all convinced that opening up farm land in distant parts of Auckland on an open slather unplanned basis is at all right for us either; but thought you were keener on the idea.
I would prefer something closer to the Unitary Plan proposed, at least as a fairly urgent start, with transport solutions to make the City work more efficiently than it does now.
There is a few reasons people are leaving the city of Christchurch for outlying regions :
1. Land values in central christchurch have shot up
2. Consents process does take considerably longer in CHCH
3. people are voting with their feet to leave the bad land area of CHCH rather than attempt to rebuild/acquire. A lot of the established areas only have small pockets of sound land.
4. limited stock available for sale and only a small number of quality stock.
5. People have limited endurance/resources to pursue auctions..the market is still hot
One area of Christchurch that has the strongest capital gain has mixed density houses of modern stock similar to the unitary plan proposed in Auckland...
I can tell you the demand is there if it is planned well with a great deal of thought. The key for this development is the developer used the areas natural advantages and selected the one building company rated for doing moderate to high density housing in NZ to be the key developer involved with the project.
One smaller property, an attached townhouse came on the market this weekend with offers over rather than auction as the marketing system, they had a multi offer situation after the first open home amounting to eight offers. Its price is comparable to a new 4 bedroom house in the outlying area mentioned above.
There is plenty of good quality land to the north and south west of Christchurch, about 10km from the ChCh central. Unfortunately it is not zoned residential so is not being built on. Instead people are moving 20km or more out to satelite towns or lifestyle blocks in Selwyn or Waimakariri.
Given that the demand is coming from people who have lost their homes in Christchurch. This means peole are not just losing their homes but also their city. Because they cannot afford to build near their established social, family and work networks. This is social engineering at its worst.
You will note the new subdivisions in Christchurch are on average further out than the 10km out of the CBD you note, the satelite towns are an additional 10kms on average. Its clear why they don't want anything of scale built closer... Although given the clogged arteries into the city from both these sources... to be free of it you need to be around 4-6 km away from the CBD.
Couple of points, you need to understand what TC classfication actually means, most new sub division land has no TC classification...TC means very little... visual identification only, two - look up the area or check geotechnical reports and water tables and three who is the common stakeholder...who is now developing closer in :-) No one is that Canny without a reason...
also have you tried to commute from there at rush hour!!
Yes my comments are general given the nature of the forum..its trying to help with small sound bites..also given there are 26 subdivisions around christchurch makes it a little hard to be precise unless you write a chapter, with your comments you simply show you are unaware of a great deal... what you do not know...possibly you should have a disclaimer at the bottom of your post..or vested interest....due diligence people...
Do you keewee property investors ever do the math ?
SK et al what is your highest grossing % for rental income vs. value of capital ?
ie Market value say $550,000 Gross rental income pa $22,500 = 4.09% ....crap returns IMO !!!
Or is it just one big tax dodge ....that the stupid NZ gummint turns a "blind eye" to.
Keewees are very silly people...... they just look after one group and stuff the rest.
kimy, I know exactly what you are saying ...but if you take the scenario, as you explained above and apply it to OTHER markets, you can actually do much better :) ....which is what I have done and will continue to do so, rather than investing anymore in an "overpriced" Auckland market.
Also, just how long do you think you can keep putting up those rents ...if you take a sample of people renting, you will find most of them can't take a rental increase, as they are financially "stretched" already.... BUT the stupid gummint goes on and on about the "free market" but gives handouts like the accommodation supplement, WFF etc .... so the stupid keewee taxpayer pays to top up those rents .....not very clever, but as a keewee property investor its great news !!
As I said ..this gummint is not that clever and the true WINNERS are the bankers who are laughing all the way to the bank !!
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.