The idea that large numbers of new homes that are consented do not get built appears to be an urban myth, with the latest figures from Auckland Council suggesting that more than 97% of new homes consented in the region actually get built.
On average it takes about two years from the time a building consent is issued in Auckland until the new home is completed and issued with a Code Compliance Certificate (CCC).
So to compare building consents issued with completion rates, CCC issuance should be compared with the corresponding building consent figures two years previously.
According to Statistics NZ, building consents were issued for 37,801 new dwellings in the five years from 2012 to 2016.
Allowing two years to undertake the work means those homes should mostly have been completed over the five years from 2014 to 2018.
| Code Compliance Certificates issued in Auckland compared to Building Consents issued (offset by two years) | |||
| Code Compliance Consents Issued | Building Consents Issued | ||
| Year | Number | Year | Number |
| 2014 | 4953 | 2012 | 4582 |
| 2015 | 5924 | 2013 | 6310 |
| 2016 | 7125 | 2014 | 7632 |
| 2017 | 8116 | 2015 | 9251 |
| 2018 | 10,637 | 2016 | 10,026 |
| Total | 36,755 | Total | 37,801 |
Auckland Council figures show that from 2014 to 2018 it issued Code Compliance Certificates for 36,755 new homes, just 2.8% short of the number of homes consented in the corresponding five year period, from 2012 to 2016.
So it appears that less than 3% of the homes that are consented in Auckland don't get built.
The accompanying table shows the number of CCCs issued in Auckland for each of the last five years, and te corresponding number of consents issued each year, offset by two years.
These show a strong rise in consenting activity which has been broadly matched by an equally strong rise in CCC issuance two years later.
And the figures also suggest the supply of new homes being built in Auckland is yet to peak.
CCCs were issued for 10,637 homes in Auckland last year, while building consents were issued for 12,682.
That suggests the number of new homes being completed in Auckland should rise by 19.2% over the next two years.
Interest.co.nz estimates that somewhere between 10,460 and 12,847 new homes (depending on how the net gain from migration is measured) need to be built in Auckland each year to keep up with its population growth.
The latest CCC figures suggest that new home construction activity in the region is very close to keeping up with demand and may even be starting to make inroads into the accumulated housing shortage that built up over the last 10 years or so.
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7 Comments
CoreLogic have looked into this. They say that 70% of building consents result in net additional dwellings. In part due to the consented units not being built, and in part due to existing dwellings being demolished to make way for newly consented ones.
If those estimates are based on CoreLogic's Aussie figures, it is probably higher more like 80% in Auckland - since Auckland is more single housing outward growth/less apartment intensification orientated than most anywhere.
I think it was based on NZ data from 2018.
“In terms of actual ‘on the ground’ impact, we measure the net change in stock on the ground due vs. what was actually consented, taking into account those properties which are demolished in order to build new properties 12 months ago, just over 10.5K building consents were issued, but the net increase to stock was only 6,800 properties.”
https://www.corelogic.co.nz/news/nz-property-market-developers-perspect…
I was wondering that too, 2 years seems too long. Gut feel in Auckland is more like 12-18 months on average, which case it would be much higher than 3%.
From June 1998 to June 2018:
Owner Occupied Dwellings went from 1,002,400 to 1,169,000 (an increase of 17%)
Rented Dwellings went from 391,200 to 630,100 (an increase of 61%)
Total private dwellings increased from 1,445,300 to 1,870,000 (an increase of 29%)
Population increased from 3,815,000 to 4,750,000 (an increase of 24.5%)
Why do we have a housing shortage again?
https://www.stats.govt.nz/assets/Uploads/Dwelling-and-household-estimat…
And because rentals “always have more people living in them than owner occupied properties” that 61% increase in rentals consumes much more of the population growth.
It/s a very benign environment out there at the moment so of course most buildings get built. Its only in downturns that you see partially completed framing becoming grey in the weather.... developers going bust
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