Building consents up in May, still falling well short in Auckland

Property

New dwelling consents are increasing but still lag well behind growing demand in Auckland where housing shortage continues to worsen

30th Jun 17, 11:35am by Greg Ninness

The number of building consents issued for new homes ticked up in May, but is still well short of what is required in Auckland, where new building starts still lag well behind migration-fuelled population growth.

The latest figures from Statistics NZ show 2794 new dwellings were consented throughout the country in May, up from 2106 in April and up 10.9% compared to May last year.

In the 12 months to May 30,645 new homes were consented, up 8% compared to the previous 12 months.

In Auckland where the housing shortage is greatest, 885 new dwellings were consented in May, compared to 726 in April and 732 in May last year

However that is still less than three quarters of the estimated 1230 new homes that need to be built in Auckland each month just to keep pace with the regions's high, migration-fuelled population growth.

That suggests Auckland's housing shortage, already estimated at more than 30,000 homes, is continuing to increase by several hundred homes a month.

Within the Auckland region the biggest area of new building activity remains Albany where 208 new homes were consented in May, followed by 159 in Rodney,

But only 65 homes were consented in Manurewa -Papakura and 88 in Franklin, where property prices tend to be cheaper.

In the Waikato, 376 new homes were consented in May compared to 264 in April and 317 in May last year.

In the Bay of Plenty 220 new homes were consented compared to 177 in April and 242 in May last year.

One of the biggest increases in new consents was in the Wellington region, where 227 new homes were consented in May, compared to 128 in April and 138 in May last year.

There was also a lift in Canterbury, where 477 new homes were consented in May, up from the 333 consented in April but well down from the 618 consented in May last year.

In a First Impressions note on the figures, Westpac's Acting Chief Economist Michael Gordon although the annual number of new consents issued in Auckland hit a new high for the current cycle of 10,379 in the 12 months to May, this remained "well short of what's needed to match population growth."

Eathquake related builds in Christchurch had slowed over the last couple of years and now appeared rto have settled around 'business as usual' levels, Gordon said.

Building consents - residential

Select chart tabs

Source: Statistics NZ

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.

26 Comments

by Boatman | 30th Jun 17, 1:25pm 1498785959

Is it possible that the market has sensed the risks at the current price levels , and we may see fewer and fewer developers ( and Financiers ) prepared to take big punts on Greenfield residential developments .

There are just to many unknowns :-

* What a change in Government may bring i.r.o. taxation , new builds , and mass housing development ( as promised by Labour )

* Where interest rates are going

* Where immigration numbers will stop with the new settings

* Where the banks perceive the risks are too high to lend

* What effect the Chinese tightening up on hard currency transfers and corruption will have

These are all things that scare a market , so the view may be to let a new Government carry the risks

by unaha-closp | 30th Jun 17, 1:56pm 1498787765

Current cycle yearly housing consents per 100,000 people:
Waikato - 8.1
BOP - 8.7
Auckland - 6.4

Auckland's Council planning is so completely incompetent.

by Davo36 | 30th Jun 17, 2:48pm 1498790929

20 years of failed planning mate.

Said in the style of Hitler: "YOU SHALL LIVE IN AN APARTMENT BY A RAILWAY STATION. NOWHERE ELSE!!!!!"

by unaha-closp | 30th Jun 17, 3:31pm 1498793492

You sir are a damned optimist.

I would treasure an Auckland Council capable of basic dictatorial idiocy, maybe in 10 or 20 years Auckland might climb up to a semblance of such sub-par bureaucratic goal seeking behaviour.

Auckland Council only operates as chaos. At any given time the planning of Auckland Council counteracts the planning of Auckland Council.

Auckland Council plans to build apartments, but makes land on which apartments might be built too expensive.

Auckland Council wants a compact city, but builds unlimited suburbs outside of the city.

by RickStrauss | 3rd Jul 17, 2:51pm 1499050304

Imagine the traffic in Auckland after another 20 years of government pretending to make an effort on housing affordability while importing as many people as possible, while the council continues to fumble along ineptly.

The Southern Motorway will be officially renamed The Southern Parking Lot, and that'll be the council's biggest accomplishment.

by Tim Tam | 1st Jul 17, 8:18pm 1498897093

Actually its not the council, they will consent houses in a reasonable timeframe as per government requirements. And they don't own the land or control finance or costs of market. There are more than enough sections to build on. Council's fault here is minimal versus the govt. Not that we want another million people in the city anyway...best solution don't build and people live elsewhere.

by Yvil | 30th Jun 17, 3:29pm 1498793356

I generally like to look at the bright side, so I will say that it's a good thing that building consents in Auckland have increased by 21.9% from a year ago (885 in May 17 vs 726 in May16). Yes, we're not there yet but it's a step in the right direction.

by tothepoint - d… | 30th Jun 17, 3:37pm 1498793860

Auckland's Unitary Plan is planning for an extra 1,000,000 people over the next 40 years. (Yes - you read one million correctly.) That equates to about 20 new households (or 70 people) every day.

Auckland needs 13,000 new houses each year to respond adequately to population growth - but is consenting just 10,000 and bonding a mere 7,000.

Ask yourself what's going to happen to Auckland house prices in the medium/long term......

by Boatman | 30th Jun 17, 3:51pm 1498794700

~~VOTE FOR THE PARTY THAT WILL PUT A STOP TO THIS MADNESS~~
[No shouting allowed. :) Ed]

Vote for the party that will put a stop to this madness. Right now that's Winston Peters

by unaha-closp | 30th Jun 17, 3:58pm 1498795117

The population growth predictions used in the Unitary Plan process were a 400,000 to 1,000,000 person increase.

Auckland Council cherry picked the upper figure, but that is not a good indication it is actually going to happen.

by tothepoint - d… | 30th Jun 17, 7:34pm 1498808090

Hi unaha-closp,

You state, "The population growth predictions used in the Unitary Plan process were a 400,000 to 1,000,000 person increase."

In fact, the Unitary Plan is planning for 400,000 more households (not people) over the next 40 years.

There's no way at the current build rate that Auckland will get anywhere near providing for that level of increase. And that's the crux of the problem (and, of course, the headache for the policy analysts and the politicians - which we read about daily).

Rationing will need to take place through the market - so prices will increase markedly over time.

What's inevitable is that the boom of 2014-2016 will not be the last one that Auckland experiences. Astute investors are already anticipating the next boom.

by unaha-closp | 30th Jun 17, 5:10pm 1498799432

Nah, the Unitary Plan was derived from the Auckland Plan, where the population growth estimates were provided by StatsNZ. 400,000 low, 700,000 medium, 1,000,000 high.

http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrate…

The Auckland Council did indeed decide on a unitary plan they say will produce 400,000 homes needed for 1,000,000 people, but as you do point out they are stuffing this up quite badly. Likewise see my comment above where Auckland is being out built by the less populous neighbouring regions.

Here is what is happening in Auckland:
- the population is expected to grow by 400,000 to 1,000,000.
- Auckland is building enough homes for 650,000.
- Auckland Council is spending enough money to build for 1,000,000, but only managing to build enough homes for 650,000.
- Auckland Council planning is exhibiting demonstrable incompetence.

Astute investors should really not trust the planning abilities of Auckland Council.

by Cowpat | 30th Jun 17, 4:06pm 1498795570

Toothepoint your numbers suggest that sufficient homes are being consented . So prices will fall

by tothepoint - d… | 30th Jun 17, 4:46pm 1498798013

Hi Cowpat,

Suggest you do a course in arithmetic before you take up property investment.

Actually, given your judgement/foibles, better you stay away from property investment altogether.

by Cowpat | 30th Jun 17, 4:41pm 1498797707

Toothepoint 20 new households (or 70 people )per day . You do the math in terms of housing.

by bob atkinson | 30th Jun 17, 5:56pm 1498802164

"Annual net migration reached 72,000 in the year to May" so if half come to Auckland (and my guess is that is conservative) then you have 98 people per day not 70. Of course native Aucklanders are leaving Auckland and the majority of these immigrants are on below average wages so live multiple people to a house. Even so they displace our poor families and that is why we have people living in garages and cars and multiple families to a small house.
Put immigration to match the average OECD level and it would be about a fifth of that figure and hold it there for two years and we begin to solve the housing problem. Then they can put it back to our world record immigration level if that is what we really need.
Why it will not happen: home owners (like myself) want prices to be sky high and businesses want wages to be 3rd world low so the national party listens to them. When home ownership drops below 50% and young people start voting it will all change but that may take another 3 national led coalitions.
Vote wisely.

by Zachary Smith | 30th Jun 17, 6:12pm 1498803177

I was reading in the news this week that immigration is at record highs for Canada and the UK too.

by tothepoint - d… | 30th Jun 17, 3:54pm 1498794856

NZ First - good entertainment for all the family.

by O4 normal | 30th Jun 17, 4:20pm 1498796432

Don't worry tothepoint will find some other numbers I'm sure, or part of

by O4 normal | 30th Jun 17, 4:27pm 1498796833

Does anyone know the % , owner occupied to renters now compared to just before this latest boom, say 2014, Auckland only, just interested to no

by Cowpat | 30th Jun 17, 4:47pm 1498798070

Census 2013, 61.5/38.5. Under 60 percent now 55-57percent owner occupied.

by JohnSmith | 30th Jun 17, 4:37pm 1498797467

Tothepoint is Ted

by O4 normal | 30th Jun 17, 4:52pm 1498798333

Yeah booms corrects, names, it's all ok, about every 10 years for donkeys housing has gone up then levelled of but long term up, good thing to get into if you can for lots of reasons, retirement, help family, I do like the idea of KiwiSaver, it's just a shame things like Aucklands competing with overseas money and the rest of nz competing with Aucklands then greed and keeping up with the jones , things like interests only loans and leveraging up your parents house , I'm not against a lot of things but using your house as a ATM to risky levels, but owell there problem but sorry if people can't have fair play fields or take stupid risks maybe the rules need to change, boom busting to these extremes 2008 and who no,s now isn't that great on the hole, just saying

by O4 normal | 30th Jun 17, 4:56pm 1498798585

Thanks cowpat that not that bad

by O4 normal | 30th Jun 17, 4:57pm 1498798660

I thought it was getting close to 50 50

by Tim Tam | 1st Jul 17, 8:10pm 1498896600

Consents is a bullshit stat beloved of National government. Interest could we pleeeeease get stats on houses issued code compliance i.e. houses finished. How many get finished versus consented - 80%?