Archive | Building consents

New statistics show 97% of consents result in home

Experimental figures Statistics NZ released today show 97% of new dwelling consents lead to a completed home.

Statistics NZ has been upgrading the regular statistics it provides, both within tables and through sets of information & summaries, but this piece of the puzzle was missing through a period when politicians & lobbyists were busily proclaiming trends, causes & proposed solutions anyway.

The Government organisation produces monthly building consent figures, quarterly estimates of building work undertaken, and quarterly estimates of how many homes there are in New Zealand. The missing element was just how many consents are completed, when they are completed and where in New Zealand they are.

To answer this, Statistics NZ produced some new experimental statistics. The test figures show that, while almost all building consents result in homes over time, “it can take almost a year from the time a consent is issued before the house-warming starts”.

Statistics NZ released experimental dwelling estimates yesterday on the Stats NZ innovation website. These include initial estimates of how many homes have been completed in the country’s 67 territorial authority areas and what the supply of housing is in each location.

Statistics NZ accommodation and construction indicators manager Melissa McKenzie said the estimates suggested that, at a national level:

  • About 97% of dwelling consents lead to a home being finished, though it dropped to about 93% during the 2008 global financial crisis
  • It currently takes about 10 months for a new home to be built after a dwelling consent is issued. The lag was about 6 months in 1998, and 12 months in 2008
  • About 28,000 new dwellings were completed in the year ended March 2017. Just under 31,000 dwellings were consented during the same period
  • About 1.84 million private dwellings were available in New Zealand at March 2017, comparable to the official dwelling & household estimates
  • Dwelling & household estimates to be released today provide an estimate for the June 2017 quarter using official methodology.

Ms McKenzie said: “While consents show an intention to build and are a good indicator of construction, we want to know how many are actually being built across New Zealand. At this stage, the new estimates are simply a test. Stats NZ is seeking feedback to see if people find the figures useful and how they could be improved.”

Link:
Stats NZ innovation website

Attribution: Statistics NZ release.

Continue Reading

Home consents resume upward trend, standalone share falls

Consents for new homes resumed their upward trend in May after a dip in April, but the rise still looks tentative against the upward lines in immigration & overall population growth.

Statistics NZ reports population growth with a calendar that rises continuously, but its monthly building consent figures appear only at the end of the following month.

The population has risen in the last 12 months from an estimated 4.69 million (97,300 total growth in the 12 months to June 2016, then another 106,000) to 4.796 million now.

At an average 2.7 residents/household, those population increases would have required housing increases of 36,000 homes built in the year to June 2016, and 39,300 built in the last 12 months (ignoring demolition or falling into disuse).

Consents for new homes fall well short of those requirements for actual construction, which means the housing “crisis” which has afflicted New Zealand is either not really a crisis, or politicians, bankers & builders don’t want to supply the solutions that would shrink the ever-widening gap.

Labour has proposed building 10,000 homes/year to start closing the gap. National has used housing accords with local councils to try to lift consent figures while at the same reducing construction conditions for those more quickly consented builds (but which have been slow to get underway) – as the country’s leaky building saga constantly warns that building standards need to rise, not fall.

For any politician to earn my vote, I would expect not just encouraging words but a plan to be laid out well before the 23 September election for fairly precise increases in home construction in various parts of the country, accompanied by financing plans which would require banking sector support for cheaper homes and government programmes to help finance cheaper homes.

And more: I would expect plans for job growth accompanying the construction of new homes – not just in new shops but a wider range of employment that would begin the task of dismantling the Auckland of one-way traffic congestion, and the New Zealand centred purely on Auckland.

Migration is an obvious issue in the housing picture. The net inflow has been boosted by the number of Kiwis returning from Australia, and that seems unlikely to be reversed in the near future as Australia’s federal government continues to stumble and job growth across the Tasman remains illusory.

The net inflow of migrants for the 12 months to May fell just short of 72,000, requiring 26,650 new homes to be built at that 2.7 residents/household average.

Building consents for new homes over those 12 months totalled 30,645, up 8% on the previous year’s 28,387, leaving 4000 consents (and mostly not yet built homes) for internal population growth of 34,000.

It’s plain that these numbers don’t stack up, which means prices will continue to rise while no political solution is evident. Added to that picture, the state of Australia’s major banks has brought warnings to tighten from international banking actors such as the International Monetary Fund, and tightening in Australia means tightening in New Zealand.

In Auckland, the one bright spot in this gloomy economic & financial morass is that the new unitary plan allows intensification over a wide spread of suburbia. Many landowners are now taking sections (or sections with an old house which most likely would be demolished) to market with consent – or ability under the plan – to build perhaps 4 units where one house previously stood.

There is a fear that this will change neighbourhoods – and it will, but not automatically badly. I write this article from a hotel room in Denver, Colorado (on a family visit, off out into the boiling sun today), and beside this pocket of city-fringe hotels there is a steady rise in both apartment living and in replacement of old homes with houses on smaller sections and with terraces & townhouses.

This city, too, believes it has a housing crisis and, like Auckland, is thinking about solutions but doing too little. It’s a city that has apartments right in the centre and many lowrise apartment blocks spread through business areas. New developments in the inner fringes are mostly lowrise – up to 6 storeys (think Britomart’s old buildings to gauge the human scale these changes are being made at). Home sizes? I’m not sure yet.

In Denver, much of the new has charm. New Zealand, and Auckland in particular, has operated on the “build to the max” mantra for decades, and charm is the first thing tossed out the window.

Building to the max (which means pricing to the max) generally rules out Auckland being a charming if over-populated city, but Auckland can develop apace, with more thought about the consequences, and become a pleasant but more populated city.

The consent picture

Standalone homes’ share of the new residential market has been falling gradually, and depending on applications for lumpy intensive construction projects for apartments, retirement villages & suburban townhouses.

In May, standalones represented 73% of the month’s consents, up from 70.6% in April but down from 77.6% in May last year. Over a year, the standalone share fell from 72.1% in the 12 months to May 2016, to 69.4% in the latest 12 months.

The national consent numbers for May and the year to May, compared to May last year, and the latest 12 months compared to the previous 12 months:

Total consents for new homes: 2794 (up 10.9% from 2520), 30,645 (up 8% from 28,387)
Total values for new homes: $1.229 billion (up 14.1% from $1.078 billion); $12.81 billion (up 12% from $11.439 billion)
Standalone homes: 2039 (up 4.2% from 1956); 21,262 (up 3.9% from 20,467)
Apartments: 123 (up 6% from 116); 2881 (up 37.5% from 2095)
Retirement village units: 137 (up 13.2% from 121); 1718 (down 17.2% from 2076)
Suburban townhouses & flats: 495 (up 51.4% from 327); 4784 (up 27.6% from 3749)
Standalone share of consents: 73% for the month (70.6%, 77.6%); 69.4% (72.1%).

Auckland residential consents up 20.9% for month

Consents for new homes in the Auckland region rose 20.9% this May compared to last May, and by 11.1% for the year. Consents for the month rose in 9 wards and fell 4 eastern & southern wards.

Auckland residential consents, month & year compared to that month last year and the previous 12 months:

Region: 885 (732), 10,379 (9434)
Rodney: 159 (76), 965 (945)
Albany: 208 (167), 2549 (2322)
North Shore: 42 (15), 521 (484)
Waitakere:  53 (44), 626 (515)
Waitemata & Gulf: 9 (20), 1093 (852)
Whau: 13 (17), 339 (195)
Albert-Eden-Roskill: 94 (37), 731 (467)
Orakei: 5 (8), 280 (356)
Maungakiekie-Tamaki: 83 (32), 468 (480)
Howick: 33 (84), 401 (658)
Manukau: 33 (30), 397 (498)
Manurewa-Papakura: 65 (106), 1065 (900)
Franklin: 88 (96), 944 (762)

Overall figures

Consents for all new residential construction, including additions & alterations at $1.9 billion, were up 12% for the year to $12.81 billion ($11.439 billion). For the month, residential consents were up 14.1% to $1.229 billion ($1.078 billion).

Across all sectors, consents for the May year were $10 billion up on the level in the May 2012 year at $19.726 billion, and up just under $2 billion (10.9%) on the total for the May 2016 year. Consents in May were up 17.4% ($520 million) to $1.871 billion.

Attribution: Statistics NZ tables.

Continue Reading

Statistics show both home & non-residential construction well on track

The third consecutive strong quarter lifted home construction by 23% in the year to March, returning to the 22%-plus growth path begun in 2012, which ran through to early 2015. In the year to March 2016, that growth path remained positive but dipped to 11.7%.

Non-residential construction, on the other hand, has faltered more than it’s surged ahead over the last 5 years. However, the usual first-quarter dip at the start of 2017 also followed 3 strong quarters and didn’t fall anywhere near the level in the March 2016 quarter. The value of 3 months’ work at the start of 2017 was equal to about 4 months’ work in 2012.

The total value of all construction over the March quarter, $4.935 billion, was up 10.9% on the March 2016 quarter and took building work put in place over the year to March to $20.357 billion, up 18.7% ($3.2 billion on the previous year).

In Auckland, the value of all building work in the March quarter was up 12.5% over the March 2016 quarter at $1.761 billion ($1.565 billion). Between those 2 March quarters, construction jumped by between 32-39%/quarter, lifting building work to a quarterly range of $1.83-1.985 billion.

Construction in the region crossed the $1 billion/quarter line in the September 2013 quarter.

  • This is a truncated version of my usual building work story and indicates a more positive picture than Statistics NZ’s assessment via trend & seasonally adjusted figures. I’ll try to return to it over the next couple of days. In the meantime, the Statistics NZ graph comparing consents & work completed gives a helpful perspective of construction direction through to the end of 2016.

Attribution: Statistics NZ tables & releases.

Continue Reading

Consents down in short month but annual figure stays above 30,000

Building consents for new homes dropped by 672 from March to 2106 in April, and dropped by 255 compared to April last year, Statistics NZ said today.

Importantly for the Government, the annual rate of consents for new homes stayed above 30,000 – 30,371 for the latest 12 months, down from 30,626 for the year to March, up from 30,162 for the year to February.

In Auckland, the 726 consents for the month were ahead of 699 in April last year but well down from the 800 in February and 942 in March, and the 10,226 for the year were up on the 10,045 to February, 10,199 to March and up 9.3% on the 9353 for the year to April 2016.

Statistics NZ noted that Easter’s occurrence in April would have reduced building consents issued for the month. In addition, when Anzac Day fell on a Tuesday it resulted in another 4-day weekend for many.

You can only use that reasoning so far, though. The value of consents for new homes nationally in March last year (including an Easter break) was $1.021 billion, falling to $948 million in the Easter-less April. The value this March was $1.199 billion, falling to $921 million.

The value of consents for all construction fell from $2.077 billion in March to $1.351 billion in April (last year, $1.505 billion down to $1.430 billion), so one April against the other the fall was 5.5%. For the April year, the value of all construction was up 10.6% to $19.45 billion ($17.589 billion in 2016).

Non-residential consents for the month were down 10.5% to $411 million ($459 million), but for the year were up 9.7% to $6.4 billion ($5.85 billion). Floor area was down 28.8% for the month to 204,000m² (286,000m²), and was down 17% for the year to 2.64 million m² (3.19 million m²).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1487 (1742), (1815), 21,179 (20,098), up 5.4% for the year
Apartments: 228 (25), 2874 (2094), up 37.2%
Retirement village units: 46 (259), 1702 (2139), down 20.4%
Townhouses, flat & units: 345 (335), 4616 (3707), up 24.5%

Around Auckland by ward, this April & last, and the April 2017 year & previous 12 months:

Region: 726 (699), 10,226 (9353)
Rodney: 81 (89), 882 (948)
Albany: 125 (135), 2508 (2316)
North Shore: 25 (17), 494 (528)
Waitakere: 25 (60), 617 (506)
Waitemata & Gulf: 166 (23), 1104 (857)
Whau: 51 (18), 343 (192)
Albert-Eden-Roskill: 25 (21), 674 (474)
Orakei: 4 (27), 283 (370)
Maungakiekie-Tamaki: 31 (26), 417 (463)
Howick: 28 (71), 452 (601)
Manukau: 32 (32), 394 (504)
Manurewa-Papakura: 73 (75), 1106 (890)
Franklin: 60 (105), 952 (704).

Attribution: Statistics NZ tables & release.

Continue Reading

Updated: Non-residential spurt lifts building consents over $2 million for month

Published 28 April 2017, updated 30 April 2017 with figures around Auckland region:
A sharp jump in non-residential projects in March lifted building consents over $2 billion/month for the first time.

The total for all construction was $2.077 billion ($1.505 billion in March 2016). The total for the year was $19.529 billion ($17.357 billion) – a $2.17 billion rise.

Non-residential consents jumped 82% from $460 million last March to $837 million this March. The floor area consented rose 41%, from 230,000m² to 325,000m².

These consents tend to be lumpy, making comparisons in a non-residential sector between one month & another meaningless. The big tickets in non-residential for this March were office (which includes public transport) $191 million, hotels $167 million, hospitals, nursing homes & health $104 million, shops, restaurants & bars $102 million.

Residential consents for March were up 17.4% compared to last March, and up 14.9% for the year. Consents for new homes totalled 2779 this March (2315 a year earlier), and 30,626 for the year (27,789).

Total residential consents for the month were worth $1.199 billion ($1.021 billion a year earlier), and for the year $12.865 billion ($11.038 billion for the previous 12 months).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1923 (1815), 21,434 (19,721), up 8.7% for the year
Apartments: 252 (32), 2671 (2536), up 5.3%
Retirement village units: 197 (134), 1915 (1929), down 0.7%
Townhouses, flat & units: 407 (334), 4606 (3603), up 27.8%

Around Auckland by ward, this March & last, and the March 2017 year & previous 12 months:

Region: 942 (788), 10,199 (9566)
Rodney: 122 (100), 890 (912)
Albany: 227 (178), 2518 (2332)
North Shore: 53 (75), 486 (533)
Waitakere: 55 (51), 652 (483)
Waitemata & Gulf: 116 (14), 961 (1239)
Whau: 40 (17), 310 (187)
Albert-Eden-Roskill: 37 (40), 670 (478)
Orakei: 12 (9), 306 (386)
Maungakiekie-Tamaki: 26 (22), 412 (462)
Howick: 24 (49), 495 (559)
Manukau: 38 (48), 394 (486)
Manurewa-Papakura: 114 (93), 1108 (876)
Franklin: 78 (92), 997 (633)

Attribution: Statistics NZ tables & release.

Continue Reading

Updated: Home consents up slightly, but revision lifts November figure to 12-year high

Published 31 March 2017, additional material 1 April 2017
Consents for new homes issued in February were up slightly – by 39 – over February last year, to 2418, raising the tally for 12 months to 30,162.

Perhaps of greater note was the revision of the November consent figure, from 2973 to 3005 new homes. I think (without time to check fully) this is the first month of 3000-plus consents since the 3447 in June 2004, which included 977 apartment consents.

That high in 2004 came 30 years after the previous high, in 1974, which was toward the end of another construction boom.

The November 2016 high theoretically came without the push from apartments, only 375 of them consented that month. But, including the 507 flats & townhouses and the 205 retirement village units (recent extra segmentation by Statistics NZ), consents for intensive construction totalled 1087.

The suburban unit/townhouse segment has fallen behind the (mostly central) apartments sector only twice in the last 18 months. That segment of the market has seen 24% growth over the last 12 months to 4533 units (3651 in the previous 12 months), whereas apartment consents have slipped 4.8% to 2451 (2574) and retirement village consents have slipped 6.2% to 1852 (974).

Standalone house consents have risen 9.1% over the 12 months to 21,326 (19,546).

Residential consents in Auckland were up slightly for the month to 800 (787) to 10,045 (9534) for the February year.

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Additional material:

Around Auckland by ward, this February & last, and the February 2017 year & previous 12 months:

Region: 800 (787), 10,045 (9275)
Rodney: 87 (80), 868 (888)
Albany: 196 (182), 2469 (2362)
North Shore: 72 (19), 508 (473)
Waitakere: 44 (44), 648 (474)
Waitemata & Gulf: 73 (179), 859 (1246)
Whau: 2 (8), 287 (179)
Albert-Eden-Roskill: 33 (20), 673 (456)
Orakei: 71 (8), 303 (485)
Maungakiekie-Tamaki: 6 (21), 408 (467)
Howick: 51 (51), 520 (602)
Manukau: 14 (51), 404 (454)
Manurewa-Papakura: 75 (67), 1087 (865)
Franklin: 76 (57), 1011 (583)

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Residential consents this February & last, and the February 2017 year & previous 12 months, in a selection of provinces:

Northland: 131 (80), 1261 (896)
Waikato: 294 (274), 3512 (3160)
Bay of Plenty: 226 (200), 2517 (2055)
Wellington: 133 (113), 2023 (1711)
Canterbury: 361 (525), 5798 (6319)

Commercial presents mixed picture

Commercial sectors present a very mixed picture. Overall, floor space is down in this month’s & year’s consents, but values are up. There’s not an even picture across sectors.

Non-residential consent floorspace for February was down 12.9% to 189,000m² (217,000m²), and for the year down 18.2% to 2,631,000m² (3,218,000m²).

Non-residential consent value for February was up 10.3% to $410 million ($372 million), and for the year up 5.3% to $6.086 million ($5.777 million).

Big changes by value for the year were hostels, boarding houses & prisons up 42.8% to $227 million; and hotels, motels & other short-term accommodation up 85.2% to $276 million.

The value of consents for all construction for the month fell 6.2% to $1.492 million ($1.59 million), and for the year it was up 10% to $18.956 billion ($17.238 billion).

Attribution: Statistics NZ tables.

Continue Reading

Auckland above 10,000 home consents/year again

Auckland’s consent level for new homes got back above an annual rate of 10,000 in January after dipping in December. The 512 consents in January were 6 above the number a year earlier.

For the year, Auckland had 10,032 consents for new homes, compared to 9930 in the 12 months to December and 9275 in the 12 months to January 2016.

Nationally, consents for the month were up 3.4%, from 1695 to 1752, and for 12 months they were up 11.1%, from 27,124 to 30,123.

January is the traditional quiet month everywhere, but not usually as quiet as it got in Auckland’s central Waitemata & Gulf ward, where consents numbered only 9 in December and fell to 4 in January.

The Waitemata part of that ward covers the cbd & its western fringe, very much apartment & townhouse territory, so consent applications tend to be lumpy. In 8 of the last 12 months the ward had fewer than 50 consents, 3 months of 114, 155 & 179, and one outstanding month when 353 consents were issued.

In the previous 12 months, the ward’s consents exceeded 100 only twice, but they were months of 405 & 278, contributing to a total for 12 months that was 20% higher.

Looking forward into the new era of Auckland’s mostly approved unitary plan, when more intensification will be possible across 90% of suburbia, developers may disperse their search for cheaper land, resulting in more intensification in smaller centres.

Consents nationally for standalone houses fell slightly for the month but were up nearly 11% over 12 months, while consents for apartments have dipped slightly over 12 months and those for suburban townhouses & units are up nearly 28%.

Around Auckland by ward, this January & last, and the January 2017 year & previous 12 months:

Region: 512 (506), 10,032 (9275)
Rodney: 55 (60), 861 (865)
Albany: 194 (123), 2455 (2304)
North Shore: 17 (13), 455 (473)
Waitakere: 18 (46), 648 (465)
Waitemata & Gulf: 4 (80), 965 (1160)
Whau: 7 (11), 293 (189)
Albert-Eden-Roskill: 22 (29), 660 (449)
Orakei: 8 (10), 240 (490)
Maungakiekie-Tamaki: 25 (18), 423 (460)
Howick: 15 (17), 520 (572)
Manukau: 17 (36), 441 (419)
Manurewa-Papakura: 50 (37), 1079 (848)
Franklin: 80 (26), 992 (581)

Consents for the 4 residential market segments in January & the 12 months to January 2017 compared to the previous January & previous 12 months:

Houses: 1253 (1286), -2.6%; 21,277 (19,183), 10.9%
Apartments: 116 (89), 30.3%; 2430 (2511), -3.2%
Retirement village units: 98 (135), -27.4%; 1915 (1908), 0.4%
Townhouses etc: 285 (185), 54.1%; 4501 (3522), 27.8%.

Sector & total values against January 2016 or the previous 12 months:

New homes: $619 million/month ($641 million), -3.5%; $10.625 billion/year ($8.906 billion), up 19.3%
Alterations & additions: $129 million/month ($115 million), 12.4%; $1.899 billion/year ($1.728 billion), up 9.9%
Total residential: $748 million/month ($756 million), -1.1%; $12.524 billion/year ($10.635 billion), up 17.8%
Non-residential: $338 million/month ($310 million), 9.2%; $6.048 billion/year ($5.876 billion), up 2.9%
Total, including non-building: $1.108 billion/month ($1.083 billion), 2.3%; $19.055 billion/year ($16.922 billion), up 12.6%.

Earlier stories:
6 March 2017: Third quarter of plus-32% rises in Auckland construction input
10 February 2017: Townhouses & flats dominate shift in home styles

Attribution: Statistics NZ tables.

Continue Reading

Third quarter of plus-32% rises in Auckland construction input

The value of building work put in place in Auckland in the December quarter fell just short of $2 billion, and was up $500 million on the input a year earlier.

Image above: Residential work has soared well above the static input to commercial construction in Auckland.

Figures out from Statistics NZ on Friday show for the whole of 2016, $2 billion more was spent nationally on new homes than in 2015 – up from $8.4 billion to $10.5 billion – and across all construction sectors there was a $3.3 billion rise nationally to $19.87 billion spent for the year, all ex-gst.

Statistics NZ said residential work in Auckland rose 4.5% in the December quarter, and non-residential 17%.

Nationally, the 1.1% rise in residential work in the December quarter was the smallest increase in 6 quarters.

Combining the input in all sectors, the growth in construction input in Auckland hasn’t risen steadily since the market bottomed in 2011.

There was a spurt of 9-13% quarterly growth in 2012, and that was followed by quarterly growth of around 30% for the last 3 quarters of 2013, tapering off to a 20.5% increase in the March 2014 quarter and actually declining in the September quarter that year.

Since that dip, Auckland growth has been strong: 13.6% in the December 2015 quarter (compared to the same quarter a year earlier), then rises of 25.6% in the March 2016 quarter, 39% in June, 32.3% in September & 34.2% in December.

Attribution: Statistics NZ tables & release.

Continue Reading

Townhouses & flats dominate shift in home styles

Suburban townhouses & flats dominated the shift in building consent figures away from standalone houses last year.

The townhouse & flats segment of the market – essentially lowrise intensification outside the central urban areas – has grown by 330% since 2011, while the standalones have steadily lost market share, falling from 81% in 2011 to 71%.

Consents for all new homes last year totalled 29,970, up 10.5% on the 27,132 in 2015, according to Statistics NZ’s figures out yesterday.

Houses made up 21,310 of the 2016 total, 19,038 the previous year, so a rise of 11.9% for the year. For the month of December, however, the 1580 consents were down 4.9% for that month a year earlier.

Consents for the 4 market segments in December & the whole of 2016 compared to the previous December & the whole of 2015 were:

Houses: 1580 (1661), -4.9%; 21,310 (19,038), 11.9%
Apartments: 138 (427), -67.7%; 2307 (2539), -9.1%
Retirement village units: 193 (159), 21.4%; 1952 (1899), 2.8%
Townhouses etc: 294 (291), 1%; 4401 (3656), 20.4%.

Sector & total values against December 2015 or the previous 12 months:

New homes: $833 million/month ($868 million), -4%; $10.648 billion/year ($8.796 billion), up 21%
Alterations & additions: $156 million/month ($149 million), 4.3%; $1.885 billion/year ($1.727 billion), up 9.2%
Total residential: $989 million/month ($1.017 billion), -2.8%; $12.532 billion/year ($10.523 billion), up 19.1%
Non-residential: $595 million/month ($555 million), 7.2%; $6.019 billion/year ($5.919 billion), up 1.7%
Total, including non-building: $1.612 billion/month ($1.611 billion), 0.1%; $19.03 billion/year ($16.859 billion), up 12.9%.

Housing consents around the country:

Auckland: 740 (947), 9930 (9251)
Whangarei: 45 (41), 662 (447)
Kaipara: 20 (19), 267 (182)
Hamilton: 76 (142), 1179 (1205)
Bay of Plenty: 177 (176), 2520 (809)
Wellington region: 115 (106), 1992 (1721)
Christchurch & districts: 344 (510), 5202 (5830)
Queenstown-Lakes: 79 (62), 945 (816)

Around Auckland by ward:

Rodney: 60 (103), 866 (844)
Albany: 170 (156), 2288 (2274)
North Shore: 28 (143), 451 (480)
Waitakere: 43 (31), 676 (454)
Waitemata & Gulf: 9 (93), 1041 (1157)
Whau: 14 (24), 297 (201)
Albert-Eden-Roskill: 112 (144), 667 (445)
Orakei: 15 (70), 242 (506)
Maungakiekie-Tamaki: 129 (19), 416 (467)
Howick: 22 (46), 522 (585)
Manukau: 21 (26), 460 (406)
Manurewa-Papakura: 59 (55), 1066 (855)
Franklin: 58 (37), 938 (577).

Attribution: Statistics NZ tables.

Related story today: Smith exultant about figures that are plainly inflated

Continue Reading

Smith exultant about figures that are plainly inflated

Former housing minister Nick Smith, now building & construction minister, heaps praise on himself for a job extremely well done: “Building activity is at a record high, topping $19 billion for 2016 after 5 straight years of strong growth”.

But we all know it’s not true. Although Dr Smith said of yesterday’s building consent report that the figures he was quoting were “in inflation-adjusted terms”, both he & the rest of New Zealand know construction costs, land prices & house prices have been distorted way beyond the realm of the Reserve Bank’s narrow inflation focus.

It’s a sector which can be measured very accurately, but the figures Statistics NZ releases monthly on building consents for new homes carry distortions because of how applications are made. In some cases such as staged developments, consent applications & costs may be reported in different time periods. However, over a year, I suspect it’s reasonable to use these figures to carry out the calculations I’ve done here on changes in floor areas, values and values/m² of construction. The value of land is excluded from building consent figures.

Going back to the bottom of the market following the global financial crisis, 2011, the statistics show an average floor area of 191.6m². It rose the next year, declined for 3 years and recovered slightly in 2016. The percentage changes were rises of 2.9% in the first year and 1.8% in the last year, but falls of 2.7%, 2.6% & 4.3% in the intervening years.

The average value/dwelling was just under $280,000 in 2011, and rose in steps of $6600-16,000 during the next 4 years, equating to gains of 5.75%, 3.3%, 4% & 2%. Then, in 2016, the average jumped $31,000 to $355,300, a leap of 9.6%.

Putting those figures together to see what the consent value/m² has been, the starting point in 2011 was $1459/m². The end point, the average for 2016, was $1951/m² – a rise of $492/m² over 5 years, or 34%. In the first year off the market bottom the rise was 2.75%, but it’s since been consistently above 6% – 6.15% in 2013, then 6.75%, 6.71% and, last year, 7.67%.

An important factor in the equation is the falling proportion of total housing categorised as houses, distinct from 3 intensive categories – apartments, retirement village units and suburban townhouses & units – all of which generally have smaller floorplates than the average house but will generally be priced more highly per m² of building. The houses category fell from 81% of all housing consents in 2011 (when the apartment sector almost disappeared) to 71% in 2016.

Dr Smith habitually talks about consent figures as if they were actual construction. Statistics NZ doesn’t supply regular figures which would show the percentage of consents that turn into actual construction. Those percentages vary cyclically, according to figures I’ve seen long ago – heading into the peak of a boom the consent figures will have risen steeply, but once the boom ends actual construction can plummet.

In his release on the consent figures yesterday, Dr Smith said: “This is the longest & strongest growth phase in building activity in New Zealand history. It involves record levels of investment in homes, commercial buildings & infrastructure. The total value of consents in 2016, at $19 billion [for all consents, not just residential], is the highest ever and 30% more than the previous peak last decade, in inflation-adjusted terms.

“I am particularly encouraged by the ongoing strong growth in residential building activity, that has increased 19% nationally & 27% in Auckland over the past year. This is the fifth straight year of strong growth. You cannot grow a sector as large or as complex as building at more than about 20% compound/year without incurring problems with quality.

“The number of homes being built in 2016 – 29,970 nationally & 9930 in Auckland – is more than double that of 5 years ago and is the highest since 2004. This growth gives me confidence we will have the number of homes increasing in line with population growth by the end of the year.

“This ongoing strong growth shows the Government’s programme to increase housing supply is working. We have aggressively increased land supply with special housing areas in the short term, changes to Auckland’s planning in the medium term, and the national policy statement on urban development capacity & Resource Management Act reforms in the long term.

“We have complemented this with the Crown land programme and a record level of direct Government projects to build homes, such as Hobsonville. We’ve also provided record levels of assistance for first-homebuyers with the KiwiSaver HomeStart scheme, which has helped more than 20,000 people into their first home with about $500 million in KiwiSaver withdrawals for a deposit.

“This Government is, step by step, development by development, getting on and addressing New Zealand’s housing challenges.”

The figure of $19 billion includes $12.5 billion for new homes and alterations & additions to homes, $6 billion for non-residential buildings and just under half a billion dollars for non-building construction. The housing component has been rising rapidly – by 25.4% in 2012, 28% in 2013, then 20.5%, 10.5% and, last year, 19.1%.

The non-residential sector had 2 strong years – rises of 21.5% in 2014 & 15.9% in 2015, but was down to a 1.7% rise last year.

Related story today: Townhouses & flats dominate shift in home styles

Attribution: Statistics NZ tables & release, ministerial release.

Continue Reading
WordPress Appliance - Powered by TurnKey Linux