Aucklanders appear to be spending less money doing up their properties than they were last year.
The latest quarterly figures from Statistics NZ show that doing up properties is as popular with Aucklanders now as it has ever been, but the average amount being spent on renovations is declining.
In the September quarter of this year 1479 building consents were issued for alterations to dwellings, the highest number since the June quarter of 2016 and the second highest since the fourth quarter of 2005.
Building consents are only required for structural alterations such as removing walls that support the roof, or adding a room to an existing dwelling, but not usually for superficial redecorating work such as repainting walls or installing new cupboards.
Alteration consents in Auckland have been above 1400 and near record highs for four of the last five quarters, so the popularity of doing up properties in the region shows no sign of abating.
However the figures suggest the average amount being spent on the properties Aucklanders are doing up may have peaked and has started to decline.
The average value of alteration consents issued in Auckland hit an all time high of $156,897 in the December quarter of last year and has declined in each of the three subsequent quarters to $132,383 in the September quarter of this year.
That's down by an average of $24,514 (-15.6%) from the December quarter peak, and was the lowest quarterly average in the last two years.
However because the number of dwelling alterations being consented In Auckland is still running hot, the total value of alteration work consented in Auckland has declined more slowly.
Even so, the total value of dwelling alterations in Auckland peaked at $221.2 million in the fourth quarter of last year and had declined to $195.8 million (-11.5%) in the September quarter of this year.
Those figures have important implications for the entire construction industry, because although Auckland accounted for just 24% of residential alteration consents issued in the September quarter, those consents were worth 41% of the total value of all alteration consents issued throughout the country during the same period, down from 46% in the December quarter of last year.
However the trend is less evident in other main centres.
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56 Comments
As expected, homeowners are starting to question whether putting money in = extra money out. Like the banks that saturate our land, the same can be said home improvement outlets now at a scale that match the boom times of yesteryear. Going forward, watch the great rationalization begin. There's a lot of jobs at stake here.
HI R-P ("Crash-Crusader"),
In recent weeks, you've been extolling the virtues of well-maintained, appealing houses!
For instance, on 13/11/2018 you highlighted the advantage of..... "Houses with most on offer, considerable investment made and the tastefully renovated".
In any case, you are being watched closely at the moment - having squarely staked your reputation on your prediction that the median Auckland house price will fall at least 5% (year-on-year) by the end of 2018......
REINZ's December Report will be published in less than a month. The moment of truth for you is approaching.
TTP
BLSH, before you question another commentators bias, you should first provide factual analysis that eliminates each mentioned threat from the immediate horizon. (your track record to date already suggests this outside of your microscope) Outside of this (what can only be described as a poor leveraged man's sideshow) you can really only question the integrity of my timeline ;-)
North Korea is still developing missiles
Share Markets are wobbling.
I certainly missed the mark on the unemployment statistic. Having said that, our labour market is more casualized than ever. It wouldn't take much of a jolt to take it from 3.9% (last recorded 2008) to 6.75%.
Your timeline? A broken clock is correct twice a day. You will be correct eventually.
As for your predictions for this year - embarrassingly wrong. You read too many American conspiracy blogs and your understanding of New Zealand’s economy and its relationship to the rest of the world is seriously misinformed.
You're just getting scared and desperate. The thought of a DGM being right, just once, unerves you buddy. Commentator BigDaddy is also in a position to know. He has been through several downturns, suffered considerable losses and returned a lot wiser and wealthier for it. Whereas, as a late entrant (post 2016) you still have a lot to learn.
Ooooh, Agent TTP says I'm being closely watched. What are you now telling homeowners in these areas that followed YOUR advice?
Albany Heights – down 7.74%, Lynfield – down 6.86%, Pinehill – down 5.84%, Waiatarua – down 5.54%, Golflands – down 5.53%, New Lynn – down 5.41%, Totara Heights – 5.34%, Flat Bush – down 5.22%, Sunnyhills – down 5.05%, Henderson Valley – down 4.92%. What are you telling people now? Foreign buyers ban is a fizzer. TTP, cheap money will only keep your narrative alive for so long before gravity takes hold.
Hi Retired-Poppy ("Crash-Crusader")
You are ethically (and intellectually) bankrupt.
The prediction you made, very clearly, was that the Auckland median house price would fall by at least 5% (year-on-year) by the end of 2018.
Thus, your reputation rests upon that.
TTP
Agent TTP, oh-ok, so my forecast of a 5% year on year decline earns the name "Crash-Crusader" does it? What do you call Sydney's 8.7% YOY decline then? I noticed you were lightening quick to abandon your call that Auckland was on the coattails of Sydney as an international city.
It's not my reputation you should be worried about.
Agent TTP, post a scenario -70% slump, assumes the banking system will be in as rosy shape as it is today. That's totally comical :) Thank goodness he's not in a position of providing financial advice on a professional basis.
On the 10th anniversary of the Global Financial Crisis, Planet Earth can now breathe a sigh of relief knowing that complacency can reign atop his permanent height of prosperity.
and your reasoning is? or maybe explain just what you mean?
I certainly think that with Peak oil etc we'll see a Second Great Depression kick in and house prices will revert to norm which means a drop in value by 60~95%.
That will however wipe just about every gambler and bank out.
Actually the two statements are not inconsistent - as much as Pointy would like to make out. One is commenting about renovation of a property, the other about the company's that rely on property renovation. The article is pointing out that the value of consents for renovations is declining - it will be interesting to see what effect this has on those company's that rely on the renovation market.
I think Pointy is deliberately misinterpreting RP so he can make argument that he can win rather than directly addressing RP's observation.
Have you not seen the median price graphs on this website? The Auckland market peaked in 2016 and has been flat ever since. Remainder of the country still rising at something like 5% per year.
You chose your moniker 8 years ago just as property prices started to rise astronomically. You literally could not have been more wrong for close to a decade. The market is now flat - your moniker still hasn’t come to fruition. Obviously one day property prices will fall (before rising again), and you’ll say ”I told you so” - but we will all know that it is just a case of a blind squirrel finding a nut due to pure chance.
As Olly Newland wrote on this site a couple of months back ( roughly)
"It doesn't matter what's happened in the last 10 years. It's happened. We are, where we are. All that matters is, what happens from here"
That so many New Zealanders have committed so much more of their savings and future income over that timeframe to what is now a depreciating asset, might be a worry to them today, and will be a worry to the country, tomorrow.
It's not about 'where will the price be in 10 years time after they've 'gone up' again" It's surviving the interim period...For many; far more than in 2012, that is going to be a challenge they will fail...
Based on that quote, Folly Noland doesn’t seem to think that the market is cyclical and that learning from the past is important.
Surviving the next financial crisis will be something that everyone will need to grapple with, not just those with investment property. For those positively geared it will just be a matter of waiting it out - and taking advantage of bargains on offer if possible.
Agent TTP and BLSH, have already declared they are part of the minority 20% and still they don't get the message. They even demanded interest.co.nz ban the 80%! Now THAT'S desperate!
A timely reminder to the easily excitable Spruiker. Houses with most on offer, considerable investment made and the tastefully renovated are still selling well. Its a property specific market that's reporting distorted median sales figures that don't reflect the value of the many homes with no buyer interest. As this article clearly implies, people are starting to question the viability of costly renovations, and so they should.
Hey RP you do realise that TTP and BLSH are more than happy to be in the 20% don't you ? In fact they would be even happier being in the 10%. The only reason they are making money is because 80% of the people on here are sitting on their hands doing nothing in the housing market.The big gains maybe coming to an end but its been a wild ride right up until now.
Perhaps you old ladies could stop name calling for a while and explain to we lay people why a capital intensive asset in Auckland that has not been increasing in value for the last couple of years, has been depreciating, and all the while inflation is ticking along is a good idea to buy. Surely property owners have been losing money in real terms for a while now, and over the long term doesn’t both property and the stock market along with most other investments largely follow inflation?
Property owners have never been losing money, thats why there has been so much speculation in the market and its simply gone ballistic over the last few years. The danger is its been such a winner that now the whole market is highly over leveraged and people with a house are in debt up to the eyeballs. The reason is not the house either from what I'm seeing, its people borrowing even MORE money due to the equity in the house and spending it on new cars and NOT paying down the debt so 10 to 15 years later they still owe the same or even more to the banks. This is an extremely risky venture if your into your 50's.
Correct, the "house flipping" days are over for those wanting to make big gains and your also now having to do some work on your house to get the your expected price. Gone are the days you just sat in it and did nothing to it and the price tripled over the course of 20 years.
Family are selling a deceased estate at the moment. Central Auckland property. Can’t sell it for CV but needs some work done to it. Loads of stock on the market also. RE Agents are telling us to go lower. Auckland is correcting and you’d have to be blind to not see that.
Good houses in Central Auckland are selling relatively well, with prices holding firm.
Hardly surprising though - as people increasingly seek to live close to the CBD for convenience and lifestyle.
It's the same as in Wellington. Try buying a good house that's close to the CBD in the capital - it's very slim pickings.
Notably, as Wellington prices edge up, the platform for Auckland will be raised. It's only a matter of time.
TTP
Good houses in Central Auckland are selling relatively well, with prices holding firm.
No, auction clearance rates are down, stock is up. Many sellers are still asking silly prices, and those that holdout for them are missing out on sales.
Realestate.co.nz is at 14340 Auckland listings this morning, I don't think it'll get to 15k before Xmas, it should start dropping as people decide they don't want to deal with RE agents and open homes over the Xmas break, and those that fail at Auction between now and Xmas mostly will pull the listing.
Not that I build them, but there have been changes in swimming pool consents that may have affected the consent values, at 40k plus each his may explain some of the value decrease.
For the record the number of pools being built is currently around 1600 - 1700 a year, usually it averages around 1000 a year (2000 to now).
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