Building consents for new houses hit a five-year high last month, with rises across most areas of the country, Statistics New Zealand said today.
The seasonally adjusted number of non-apartment dwellings increased 13%, the largest increase since August 2011, when there was a 16% rise.
However, the much talked about Auckland market is still showing relatively modest signs of recovery from its recent very low levels of activity. In the first four months of this year there have been 1669 housing approvals in Auckland, which would put the city on target for about 5000 new houses this year - well short of the kind of levels being aimed for in the new Auckland Housing Accord.
Nationally, there were 1755 new houses, including apartments, consented in April 2013.
This was the highest number since April 2008, when 2373 were consented, including 771 apartments.
Excluding apartments, there were 1541 houses approved in April, which is 41% ahead of the number approved in the same month a year ago.
Among the 214 apartments during the month, 115 were retirement village units.
"April was a bumper month for building consents for new houses across the country. While the numbers were higher in Canterbury and Auckland this month, compared with April 2012, the rest of the country also made a significant contribution to the increase,” industry and labour statistics manager Blair Cardno said.
"In particular, Wellington and Otago regions together consented 185 apartments, boosting new house numbers there.”
The seasonally adjusted number of new houses, including apartments, increased 19% in April 2013, up from an 8.3% fall in March, when the figures were affected by the timing of Easter.
Monthly changes in the seasonally adjusted number can be volatile, partly due to the rise and fall in apartment numbers.
Earthquake-related building consents in Canterbury were valued at NZ$52 million, including 49 new houses. Non-residential building consents were valued at NZ$308 million in April 2013, up 35% compared with April 2012. Data for building consents is obtained from all territorial authorities in New Zealand.
Regionally, some of the key figures in April, when compared with the same month a year ago included: Wellington up 159 (including 82 apartments in Wellington city and 63 retirement village units in Kapiti Coast district) to 238, Canterbury up 115 to 397, Auckland up 71 to 431, and Otago up 62 (including 40 retirement village units in Dunedin city) to 115.
ASB economist Christina Leung said dwelling consents issued in Auckland increased 14.3% in April by ASB's seasonally-adjusted estimates.
"But this follows a sharp decline in the previous month. Overall, the increase in house-building activity in Auckland is not enough to keep up with demand, particularly as net migration inflows continue to recover.
"We expect housing supply constraints will remain acute in Auckland over the coming year, and this will continue to drive relatively strong house price inflation in the region," she said.
"Dwelling consent issuance had been strong in Auckland over early 2013 as stronger house price inflation encouraged house-building in the region, but this increase in house-building demand appears to be slowing. This is a concern, particularly as the recovery in net migration inflows is likely to put further demand pressures on the housing market over the coming year."
Building consents - residential
Select chart tabs
35 Comments
Exactly as I said in
low interest rate will boom housing markets. And, a booming housing market will crowd out productive side of NZ economy.
I certainly do kimy. But my hourly rate for any kinds of advise on investment is pretty high.
Since you are so nice to me today compared with yesterday, I will give a hint -- wait until National being elected next year, after RMA being amended, and put all your $ into energy.
You are misisng the point.
Obviously you think the housing bubble you are up to your proverbials in satisfies all these scatter shot questions you are firing at any dissenters.
Take away all those incentives like the tax structures, bank lending policies and you're speculative property bubble looks exactly like what it is.
I'm afraid your missing the point SP, Kimy is interested in making money and the point she's making is that right now Auckland property is the best game in town. A lot of commentators here slag off property investment but then can't make any specific recommendations where better to put your money.
Interest.co.nz "Helping you make financial decisions"
not
"fixing the problems created by central and local govn"
Don't be so naive to think that comments made here will in any way shape policy in NZ.
Don't be so quick to discount the NZX. There's a lot to be made on listed NZ tech companies, have a look at Diligent and Xero's performance on the NZX the last year. Those boats have sailed but there are some new IPOs and listings coming up soon that are very attractive.
If you want to start your own export business find a small (local) food producer not currently exporting. Assuming it's a good (tasty) product, brand it right then approach a Chinese distributor (middle-man) they''ll practically fall all over themselves if it's got NZ made written all over it. Domestically, those businesses make next to nothing (so cheap to buy into) cause the volumes not there but in China... Take my business for example, in NZ a tester sample to a supermarket might be 1 box, the first tester sample I sent to China, 2 40 ft containers.
Absolutely. Interest rates need to rise from the present emergency low setting to at least a neutral stance, or at a minimum we face a re-run of the 2002-2007 period. House building to soar, a rapidly inflating house price bubble, unemployment now falling, growth now fairly robust at around 2.5-3% and Fonterra announcing a near record payout to boost rural spending. Why an earth are interest rates still set at levels designed to stave off financial Armageddon, circa 2008/9?
Xingy - that's to a large extent, horsepoo.
your 'economy' is about people consuming. They have to do that somewhere, and store theor consumables somewhere. That is in/about/of the home, few have other site choices. You have no 'economy' without people in houses, and not much without the building/furnishing/maintaining of them. Trying to get rich by trading existing items, of course, is a zero-sum game - you're right about that.
I guess you could get everone out in the Square, eating burgers non-stop. Might work.
:)
And do you remotely understand WHY interest rates had to be pushed so high in the last cycle? It was precisely because the Reserve bank sat on its hands for much of the noughties in the first place and allowed a housing bubble to inflate by holding interest rates too low for too long (which lead in turn to all the associated problems we still face - deficits, debt etc). Earlier more decisive action would have removed the necessity to eventually hike rates so high.
I appreciate your only concern is your portfolio of rentals and the leverage you are exposed to as a consequence but please for one moment at least attempt to step out of that box of self interest.
If you are whining about the potential of interest rates to move from Hyper stimulatory to NEUTRAL levels at the moment then God help you if they eventually had to move to restrictive (6% plus).
Utter nonsense - Europe had very low rates of interest up to 2007 and yet they suffer more than we ever have. - the low historical OCR is a tribute NZers owe the Australian banks along with the outsanding wholesale guarantees and the new source of emergency equity when OBR kicks in.
Not at all. I fought and lost that battle, but still soldier on.
100% CORRECT. ONE THING WELL NEVER CHANGE!
Loaning money is eazy-pezy.
Making money is hard.
If one is borrowing heavily to get into residential market these days; profits are and well be few and far between. One may even make a loss :(
As housing supply, interest rates and costs (i.e. insurance) increases. You'll belong to that special bread of "debt slaves" living in fear of failing to service debt or getting less than what one paid from an allready debt burdened generation.
I just love watching Auckland house prices go through the roof ....literally !!
As the higher they go, the bigger they fall......
It will only take a signature of the Rt. Hon. John Key et al for us to become like Australia and non-residents will be unable to purchase existing residential property .....then who ??? SK will be supporting these high prices, that you yourself wouldn't even pay for ......
Take these purchasers out of the market and we'll see the "true" demand for Auckland property.......
Does Olly need to flip a few to keep solvent in a hard to find finance world? Growth so far is below the cost of interest on existing debt.
The rising housing market is leading to increased consumer spending.
https://www.interest.co.nz/personal-finance/64684/credit-information-bu…-
immigration cycle has turned in inflows rising
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10887222
Extra 2 Billion dollars into the economy through milk prices:
http://www.reuters.com/article/2013/05/28/fonterra-payout-idUSW9N0CS027…
More spin, absent fact - note my emphasis on expected.
New Zealand's Fonterra, the world's biggest dairy processor, said it expected to increase the payout to farmer shareholders next season as solid demand and tough global weather conditions underpins global prices.
And they often revise their forecasts up a bit and sometimes down a bit.
NZ trajectory is clearly up.
No need to spin that.
Those who saw it coming a while ago are positioned nicely - others who are too timid and afraid to take a position or who cant see past the noise will miss out again.
SK
NZ trajectory is clearly up.
Fonterra was nevertheless cautious about the prospects, and said prices may have peaked. The cooperative said it was holding its current forecast farmgate milk price for the current season at $5.80 per kg, and a forecast dividend of 32 cents per share, amounting to a cash payout of $6.12 for a fully shared-up farmer. The forecasts for the current season, and the upcoming seasons, are subject to revision.
Spierings told APNZ the drought had taken the shine off what would have been a strong season. Before the drought, production was running six per cent ahead of the previous record year. "That six per cent has gone down to a small negative."
He said volatility on world commodities markets meant Fonterra had taken a cautious approach. "Basically, that means don't finance your farm at around a $7.00 milk price." Read more
Was at a farmers meeting tonight. No one was too excited about the announcement. We all know it is subject to revision throughout the year. As I heard one farmer say - It will be October 2014 before we have received the full $7/kg - 16/17months away. A lot can happen between no and then.
That is what I already said:
And they often revise their forecasts up a bit and sometimes down a bit.
NZ trajectory is clearly up.
No need to spin that.
Those who saw it coming a while ago are positioned nicely - others who are too timid and afraid to take a position or who cant see past the noise will miss out again.
SK
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108…
Good news with the upward trajectory in construction - good source of jobs for all those returning kiwis and new immigrants.
It does appear that in NZ property is the only short or long term return which people feel more confident about. However if house prices rise above irrational sense this leads a drag on the economy of NZ. High cost of living = less competitiveness to produce and therefore we need export jobs to cheaper manufacturing sites in Asia. High cost of living also leads to less spending in the real economy as households are highly leveraged. Highly leveraged households and governments leads to downgrades and higher interest rates. A good economy is low debt and which is not too hot or too cold. Highly debted countries you have to pay higher taxes and living standards drop. We need a more controlled economy so that we do not build up problems for future generations. Currently developed nations have big debt problems and seem to be going down the same path again for a repeating crisis.
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.