Tag Archives | building consents

Housing market share moves away from standalones, but not to apartments

Over the last 5 years, standalones’ share of residential building consents has dropped from around 80% to, in the year to July, just below 70%. The cry from intensification advocates has been “Build up, not out”, so you might suppose the fall in standalones’ market share has been taken up by apartments.

And you’d be wrong. The apartment & retirement village sectors have both been left in the shadow of the suburban townhouses & flats. The demand has been for less garden but still some space, and not too far off the ground.

The statistics don’t differentiate between houses on a full section and cross-leases, but my impression is that cross-leases (including townhouses) are replacing houses on full sections in developments following site aggregation.

These are the shares of consents for houses & townhouses/flats over the last 6 July years:

2012: houses 80.5%, townhouses 6.4%
2013: houses 81.3%, townhouses 7%
2014: houses 76%, townhouses 9.7%
2015: houses 70.6%, townhouses 13.7%
2016: houses 71.5%, townhouses 13%
2017: houses 69.8%, townhouses 15.5%

Apartments & retirement village units shared about 13% of consents in 2012, and about 15% in the last 2 years.

As construction started to grow out of the global financial crisis in 2012, apartments represented only 4% of consents that year, against 9.1% for townhouses.

In the last 2 years, those consent shares rose to 7.7% for apartments and 7.8% for retirement villages in 2016, then to 9.4% for apartments this year, but falling to 5.3% for retirement village units – despite the well publicised growth in the retirement village sector.

More change will occur in Auckland’s suburbs as a result of Auckland Council’s unitary plan replacing all the old zonings, providing for more intensification throughout the suburbs and for taller buildings in & around business centres.

NZ Retail Property Group is developing apartments above its Milford mall and also intends to intensify at Birkenhead, 2 early examples of what will become a trend. On suburban streets, small site aggregations will allow for handfuls of townhouses to be built.

Bolder developers will take on larger aggregations, so you will see bigger developments of townhouses and some apartment blocks, but the focus will remain on adult occupants rather than more space for families.

I’d like to be proven wrong on that point, but I expect it will be some time before we see the US-style condominium developments for family occupancy. The strength of that market in the US, led by large corporate owners, pushed private home ownership down to 62.9% in the second quarter of 2016, the same level it was at in the third quarter of 1965. Ownership peaked at 69.2% in 2004-05. After the 2016 decline, the St Louis Federal Reserve Bank’s index rose to 63.7% in the December 2016 & June 2017 quarters.

Statistics NZ said in 2014, on the basis of the 2013 census, that individual home ownership here fell to 49.8%, down from 53.2% in 2006. In addition, homes owned by family trusts increased from 12.3% in 2006 to 14.8% in 2013, taking the totals in private ownership to 65.5% in 2006, and 64.6% in 2013.

The New Zealand way of doing intensive developments in the last 35 years has been for developers to sell individual units, and construction quality failures don’t seem to have dented the enthusiasm for this kind of individual investment.

The retirement village model could be replicated in the apartment & townhouse development sectors, where a corporate holds ownership for medium-term occupants, but there’s no sign of that happening yet. Developers here still look on development as their function in life, not a develop-&-beyond model.

If we had a more mature sharemarket where long-term thinking was espoused, there would be a natural place for developers & corporate owners of such property, but that, too, is a long way off.

Link:
1 September 2017: Consent movement on hold

Attribution: Statistics NZ tables, St Louis Fed chart.

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Consent movement on hold

In Wednesday’s newsletter I wrote: “Figures just released by Statistics NZ – building consents for new homes down 49 in July from July last year at 2762 – a lift in standalone house consents, falls in all 3 intensive housing categories (apartments, retirement village units and suburban townhouses & units).”

The first one relates to standalone housing’s share of the residential market, but I’ve run some statistical comparisons on that in a separate item.

Here are the details from Statistics NZ’s Wednesday release of the July figures:

New home consents up in mixed year

Consents for 2762 new homes were issued nationally in July, the third highest monthly tally this year but below a purple patch of 3 months last June-August.

This year, consents have been over 2700 in 3 months, but were down at 2100 in April, so it’s been a mixed picture.

In those 3 purple months last year, 2752 consents were issued in June, 2811 in July, 2834 in August. The volumes remained high through to December, including 3005 consents issued in November.

The election and constraints by the Reserve Bank & commercial banks have been blamed for a quieter housing period, and a drastic fall in foreign buyers (mostly Chinese) for a decline in the secondary housing market.

Given those circumstances, consent figures close to those of a year ago can be regarded as healthy, but it’s hardly surprising that consent numbers for new homes were up only 4.5% for the year and down 1.7% for the month, led down by all 3 intensive segments of the new housing market.

Annual consent level stuck in narrow band

The 30,404 consents for new homes – only 320 more than for the previous 12 months – maintains the consent level in a band just above 30,000/year, which was reached last October.

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

Total consents for new homes: 2762 (2811), down 1.7%; 30,404 (29,084), up 4.5%
Total values for new homes:  $1.18 billion ($1.03 billion), up 14.1%; $12.92 billion ($11.75 billion), up 10%
Standalone homes: 1900 (1761), 21,229 (20,790)
Apartments: 367 (425), 2855 (2242)
Retirement village units: 145 (189), 1607 (2278)
Suburban townhouses & flats: 350 (436), 4713 (3774)
Standalone share of consents: 68.8% (62.6%), 69.8% (71.5%)
Suburban townhouses & flats share of consents: 12.7% (15.5%), 15.8% (13.1%)

Auckland residential consents fall 28.8% for month

Consents for new homes in the Auckland region fell 28.8% this July compared to last July, but rose by 4.5% for the year. Consents for the month rose in 6 wards and fell in 7.

Auckland residential consents for July, compared to July last year, and the latest 12 months compared to the previous 12 months:

Region: 774 (1087), 10,051 (9622)
Rodney: 83 (71), 1004 (935)
Albany: 159 (215), 2529 (2250)
North Shore: 38 (18), 516 (502)
Waitakere: 42 (72), 576 (568)
Waitemata & Gulf: 183 (353), 870 (1032)
Whau: 16 (41), 353 (252)
Albert-Eden-Roskill: 14 (55), 800 (525)
Orakei: 27 (20), 255 (366)
Maungakiekie-Tamaki: 34 (16), 482 (388)
Howick: 34 (64), 363 (616)
Manukau: 18 (15), 404 (464)
Manurewa-Papakura: 55 (79), 949 (951)
Franklin: 71 (68), 950 (773)

All construction for July compared to July last year, and the latest 12 months compared to the previous 12 months:
Total: $1.786 billion ($1.675 billion), up 6.6%; $19.53 billion ($18.54 billion), up 5.3%
Non-residential: $576 million ($614 million), down 6.1%; $6.2 billion ($6.3 billion), down 1.5%

Link:
1 September 2017: Housing market share moves away from standalones, but not to apartments

Attribution: Statistics NZ tables.

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Housing altimeter sticks on 30,000

Consents for new homes exceeded 30,000/year in the 12 months to October 2016, the first breach of that round figure in 11 years, and there the altimeter has stuck.

While a crisis is normally something short, what in New Zealand has widely come to be called a housing crisis has run long – since the immigration spikes of 2003-04.

Construction hasn’t keep up with migrant demand since that spike, and has fallen well short of demand from the natural increase combined with the more recent spike that began 5 years ago after a net outflow of 3191 in the June 2012 year.

Net immigration of 72,305 people in the latest 12 months would require 26,780 extra homes at the national household average of 2.7 occupants.

According to Statistics NZ’s population clock, the population ticked over 4.8 million on 20 July and has since added another 2437 people (post-census estimates). The estimate at 31 December 2015 was 680 short of 4.6 million, so in 19 months our population has risen by 203,000, or 10,700/month, or 128,300/year, requiring 47,500 extra houses (net of demolitions)/year.

Stats NZ now estimates completion rates

Experimental dwelling statistics that Statistics NZ issued today, alongside its regular monthly figures, indicate a completion rate of 86.6% of consents issued over the last 5 years, rising to 88.8% over the last 2 years.

The experimental statistics (which Statistics NZ warns are not final and shouldn’t be relied on yet for decision-making), show 123,222 homes consented since the June quarter of 2012 and 106,746 completions. For the last 2 years, the figures are 58,415 consents, 51,863 completions. On the average of 2.7 persons/household, those completions in the last year would house 140,000 people – about 12,000 more than the net population rise over those 2 years, and excluding demolitions.

But, while the population clock continues to creep up, construction has stagnated. After passing 30,000 consents/year last October, the annual figure dipped below 30,000 in December and, since then, the strongest month was May at 30,645 consents/year.

Reduce it to actual built numbers (and that’s currently an average 10 months after consent is issued, according to the experimental figures), completions would be about 27,200/year – 57% of the required 47,500.

Home number down from May, annual rate stagnating

Consents for new homes dropped from 2794 in May to 2560 in June, taking the annual figure down as well, though it remained above 30,000.

Statistics NZ read the positive in its release: 30,453 new houses, apartments, townhouses & flats consented in the year to June, up 4.7% on the 29,097 in the previous 12 months.

I’ve read it as stagnation since the 30,161 in the 12 months to October, with an upward range of under 500 on a rolling 12-monthly basis since then, and a fall from the top of that range, 30,645 in the year to May.

Statistics NZ prices, accommodation & construction senior manager Jason Attewell said in today’s release: “Annual new home numbers are nearing those last seen in 2004, although they remain well below the all-time peak of the mid-1970s, when consents reached about 39,000/year.”

The secondary residential market in Auckland has softened in response to Reserve Bank measures constraining lending and the exit of Chinese investors who’d been prepared to pay top dollar without question, after unrestrained lending & the Chinese investment clamour pushed the market sharply upward last year and for a short revival this year.

That, in turn, should raise uncertainty in the residential construction markets, as price levelling if not sharp falls becomes more evident.

Suburban flats & townhouses jump again

One change in the overall new-build market has been in the market share of standalone housing, down from 81.1% in 2012 & 2013 to 69.25% in the latest 12 months. Apartment & retirement village consents are more volatile as they’re mostly for large developments, but the share of suburban flats & townhouses has risen strongly over the last 5 years, from 6.1% of consents nationally to 15.8%.

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

Total consents for new homes: 2560 (2752), down 7%; 30,453 (29,097), up 4.7%
Total values for new homes:  $1.05 billion ($1.08 billion), down 2.9%; $12.78 billion ($11.69 billion), up 9.3%
Standalone homes: 1691 (1863), 21,090 (20,828)
Apartments: 268 (236), 2913 (2261)
Retirement village units: 222 (289), 1651 (2206)
Suburban townhouses & flats: 379 (364), 4799 (3802)
Standalone share of consents: 66.6% (67%), 69.25% (71.6%)
Suburban townhouses & flats share of consents: 14.8% (17.7%), 15.8% (13.1%)

Auckland residential consents fall 1.6% for month

Consents for new homes in the Auckland region fell 1.6% this June compared to last June, but rose by 7.4% for the year. Consents for the month rose in 6 wards and fell in 7.

Auckland residential consents for June, compared to June last year, and the latest 12 months compared to the previous 12 months:

Region: 906 (921), 10,364 (9651)
Rodney: 105 (78), 992 (938)
Albany: 247 (211), 2585 (2270)
North Shore: 45 (70), 496 (526)
Waitakere: 45 (65), 606 (551)
Waitemata & Gulf: 61 (114), 1040 (957)
Whau: 91 (52), 378 (231)
Albert-Eden-Roskill: 160 (50), 841 (499)
Orakei: 12 (44), 248 (374)
Maungakiekie-Tamaki: 20 (24), 464 (495)
Howick: 32 (40), 393 (636)
Manukau: 23 (19), 401 (490)
Manurewa-Papakura: 19 (111), 973 (937)
Franklin: 46 (43), 947 (747)

All construction for June compared to June last year, and the latest 12 months compared to the previous 12 months:

Total: $1.536 billion ($1.847 billion), down 16.8%; $19.4 billion ($18.3 billion), up 6%
Non-residential: $451 million ($739 million), down 38.9%; $6.24 billion ($6.14 billion), up 1.6%

Earlier stories:
7 July 2017: New statistics show 97% of consents result in home
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
10 February 2017: Townhouses & flats dominate shift in home styles
19 January 2017: Building consent highs still don’t match migrant demand
7 January 2017: Intensive housing moves further ahead in suburbs
20 December 2016: Consents breach 30,000/year mark
29 July 2016: New home consents top 29,000/year

Attribution: Statistics NZ releases & tables.

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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.

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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.

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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.

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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.

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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.

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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

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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.

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