Archive | Construction

Construction rising but more slowly

The rise in building work put in place dipped again in the year to September, as it did in 2015.

It still rose – by 10.4% for all buildings, 13% for residential – but those increases were down from a total 17.3% increase for all construction in 2016 and a 20.2% increase in 2014, and from 19.3% for residential in 2016, 26.2% in 2014.

In current dollar terms, residential work in the 12 months to September was worth $13.6 billion ($12 billion the previous 12 months). Total work was worth $20.93 billion ($18.95 billion in the previous 12 months).

Statistics NZ said the volume trend for all building work was 0.6% below the series peak reached in the September 2016 quarter. (This series began in the December 1989 quarter, so doesn’t include the mid-1970s residential building boom seen in building consent statistics).

For the September quarter, the value of residential work rose 9.7% from a year ago to $3.6 billion ($3.29 billion), and the total rose 6.4% to $5.5 billion ($5.18 billion).

Methodology to change

Statistics NZ said it would raise the value threshold used to determine which building project activity is modelled from consent data, and which activity is surveyed in the quarterly building activity survey, in the December quarter. “This change will reflect recent inflation in construction industry costs. This will not affect any activity already being surveyed, only the data source for new projects being monitored, and will therefore not cause any revisions to historic value of building work put in place statistics.”

Statistics NZ will publish more information about these changes at its next release on the value of building work put in place, for the December quarter, to be published on 7 March.

Attribution: Statistics NZ tables & release.

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Victorian taskforce detects cladding blindspot, but 8 hospitals are being reclad

A cladding taskforce the Victoria government established in July has found extensive compliance issues. And, as products became more prevalent & visible, “a general complacency or blind spot occurred as to the risks”.

Outside the taskforce’s report, state planning minister Richard Wynne said in a release that cladding had to be replaced at 8 hospitals and another 12 hospitals remained “under assessment”.

The state government established the taskforce to investigate the extent of non-compliant external wall cladding on buildings statewide, and make recommendations for improvements to protect the public and restore confidence that building & fire safety issues are being addressed appropriately.

The fire that ripped up the Grenfell apartment tower in London in June, moving vertically via the external cladding, resulted in a confirmed 71 deaths. 350 people were evacuated from the building.

But the alarm bells were raised in Melbourne’s Docklands 3 years ago, when the same thing happened in the Lacrosse apartment building – that time without any deaths.

The Victorian taskforce has found systems failures had led to major safety risks & widespread non-compliant use of combustible cladding.

An audit by the Victorian Building Authority after the Lacrosse fire confirmed the extent of non-compliance.

The taskforce said in its interim report, out last Friday: “We found the failings identified by the Victorian Building Authority in 2015 were not merely administrative, or paper-based, but were significant public safety issues, which are symptomatic of broader non-compliance across a range of areas within the industry.

“The problem of widespread non-compliant cladding can be attributed to 3 factors: the supply & marketing of inappropriate building materials, a poor culture of compliance in the industry, and the failure of the regulatory system to deal with these issues.”

The taskforce tapped into the expertise of industry professionals & organisations through a stakeholder reference group, and summarised their submissions:

  • inadequate compliance & enforcement and low risk of consequences to deter breaches of the law
  • competitive commercial pressures which incentivise the taking of shortcuts
  • over-reliance on the building surveyor role as an assurance mechanism
  • inadequate onsite inspection, supervision & quality assurance
  • inaccurate & potentially misleading labelling &/or marketing of products
  • complexity, ambiguities & poor understanding of the application of the national construction code and how to comply with it
  • variations in regulations & codes and their inconsistent interpretation over time regarding combustibility tests & use of panels
  • a widely held view that combustibility standards in the national construction code are too onerous and stifle new product innovation
  • substitution of non-compliant products between the approval & construction phases
  • incorrect, inadequate or misleading documentation, including product certificates
  • poor quality workmanship, or inexperienced professionals, highlighting a general need to increase skills & capabilities among building practitioners, and
  • poor understanding of performance-based solutions, evidentiary requirements & inadequate oversight.

The taskforce said aluminium composite panels with a polyethylene core were of particular concern: “This type of cladding has been implicated at Grenfell & Lacrosse and is combustible. Rendered expanded polystyrene cladding is also of concern.”

Australia’s national construction code requires that external walls of buildings, 3 storeys & above, must be non-combustible. This includes cladding affixed to or forming part of an external wall.

The taskforce identified up to 1400 buildings as most likely having aluminium composite panels with a polyethylene core or expanded polystyrene.

The state government said no building had required an evacuation order, “provided certain safety measures are met while rectification works are carried out, such as alarms, sprinklers or evacuation procedures”.

But the government directed its building authority to inspect more worksites & buildings, including a statewide audit of residential buildings likely to have combustible cladding.

And the state’s health & human services department said an audit of 1100 buildings had identified 8 hospitals where non-compliant cladding must be replaced. Another 12 hospitals remained “under assessment”.

Links:
1 December 2017: Victorian cladding taskforce, interim report
Lacrosse Tower fire, Melbourne Docklands 2014, city surveyor’s report

Attribution: Taskforce & ministerial releases.

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Sharp drop in apartment consents, standalones & total static

Statistics NZ highlighted a sharp drop in apartment consents yesterday when it issued building consent figures for October, but that’s only a small part of the total market, and a volatile one at that.

Most significantly in a comparison with October last year, consents for standalone homes were static and the total for the October year was also static – still in the range of 30-31,000.

Consents for standalone homes & retirement village units were down slightly for the year, apartments & suburban units were up by about 500 each.

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

Total consents for new homes: 2549 (2575), down 1% ; 30,866 (30,225), up 2.1%
Total values for new homes:  $1.23 billion ($1.14 billion), up 7.7%; $13.36 billion ($12.46 billion), up 7.2%
Standalone homes: 1806 (1802), up 0.2%; 21,194 (21,369), down 0.8%
Apartments: 78 (229), down 65.9%; 3001 (2555), up 26.4%
Retirement village units: 220 (174), up 26.4%; 1902 (2034), down 6.5%
Suburban townhouses & flats: 445 (370), up 20.3%; 4769 (4267), up 11.8%

All construction for October compared to October last year, and the latest 12 months compared to the previous 12 months:
Total: $1.86 billion ($1.74 billion), up 6.6%; $20.2 billion ($19.05 billion), up 6.2%
Non-residential: $584 million ($526 million), up 11.2%; $6.47 billion ($6.1 billion), up 6.1%.

Attribution: Statistics NZ tables & release.

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Supreme Court rejects appeal by James Hardie against class action

The Supreme Court ruled yesterday against house cladding manufacturer James Hardie NZ’s attempt to stop a group of owners of leaky homes from having their claims heard as a class action.

Others who haven’t yet joined the group have been given until 30 January 2018 to do so.

High Court judge Rebecca Ellis ruled in 2016 that the group of owners of homes clad with James Hardie products Harditex & Titan board could take a class action against James Hardie & group company Studorp Ltd.

The Court of Appeal also ruled in favour of a class action in August this year.

Justice Ellis found 3 common issues which warranted making a representative order:

  • whether James Hardie owed the owners a duty of care in tort
  • whether James Hardie had breached that duty, and
  • whether the statements made in James Hardie’s technical literature were misleading & deceptive for the purposes of the Fair Trading Act.

The Court of Appeal upheld those findings, saying on the issue of duty of care, the considerations would be “materially the same or similar” for all claims.

The Court of Appeal found that, when the substantive case is eventually heard, “determination of the 3 common issues will result in findings that are binding on James Hardie & all members of the class. Determination of other aspects of the claims such as causation & loss will be determined on an individual owner basis.”

The Court of Appeal also concluded that a class action would “better achieve the just, speedy & inexpensive determination of the proceedings than the test case procedure” for which James Hardie contended.

Wellington law firm Parker & Associates, representing the building owners, is now encouraging affected owners still outside the group to move quickly. Lawyer Dan Parker said: “We are dealing with a large number of inquiries, many from people who have seen and are responding to the claim for the first time. A number of owners have approached us, unaware of any problems with their properties until expert investigations identify issues. They have subsequently joined the claim.

“We will be pushing forward now to deal with owner inquiries and to get as many owners signed on as possible. As it is a self-funded action, the bigger the group is, the lower the costs/owner.

“The opt-in period will be the last chance for most affected owners to pursue any legal action for recovery of their losses. If they join during the opt-in period they will not be affected by a 15-year limitation longstop that will probably otherwise bar claims after the opt-in period expires. Also, the Supreme Court confirmed last year in the leaky schools litigation that the 10-year Building Act limitation longstop does not apply to a product liability claim like this.”

The group first took a product liability claim against James Hardie & Studorp for negligence & breach of the Fair Trading Act in 2015.

Owners alleged that leaks in their homes were attributable to inherent defects in James Hardie cladding systems, and that the company made misleading statements about its cladding systems in its technical literature. James Hardie denies the allegations.

Harditex was used in construction of thousands of homes from 1987 until the early 2000s, and Titan board was widely used from 1995.

Attribution: Supreme Court decision, Parker release.

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New home consents jammed in 1000/year range

Consents for new homes, which fell one dwelling short of 30,000/year 12 months ago, remained jammed in the 30-31,000/year range in September.

The 2770 consents for the month were up 6% on a year ago, and the 30,892 consents for the year were up 3% on the previous 12 months.

Values, on the other hand, were well ahead – up 14.2% for the month, 8.6% for the year. (Total consent values don’t work out neatly to price/dwelling because of the way consents for large staged projects are handled, but have been running well above rises in consent numbers, an indication at least that housing costs have been rising well beyond official inflation figures.)

Statistics NZ said today it had reviewed how it deals with seasonal adjustment – highlighted by the problem of trying to compare March & April figures when Easter habitually wanders from one month to the other, but affecting other times of the year as well. The issue of staging, especially large apartment projects, is probably a bigger factor.

The result of the revision for August was a cut in seasonally adjusted numbers from 10% to 5.9%. On that basis, I’ll stick to actuals. Click the link below to check that story.

Standalone homes’ share of the market fell 6 percentage points from a year ago to be dead on two-thirds of new consents, and fell by 2.4% annually. The number of standalones consented fell by 49 for the month, 109 for the year.

The less visible sign of intensification, suburban townhouses & flats, has grown to 15% of the market, but the more visible apartment sector has been more volatile, heavily dependent for years on offshore investors to get projects started.

Many of the newest apartment developments are smaller than the big-block central area highrises, coming in under 50 units and more easily bankable as the smallest units in them are no longer in the “shoebox” category.

Apartment consents were up over 53% for the month & 22% for the year. Their share of the new-home market jumped to 10.2% for the year & 15% for the latest month.

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

Total consents for new homes: 2770 (2614), up 6%; 30,892 (29,999), up 3%
Total values for new homes:  $1.21 billion ($1.06 billion), up 14.2%; $13.27 billion ($12.22 billion), up 8.6%
Standalone homes: 1843 (1892), down 2.6%; 21,190 (21,299), down 0.5%
Apartments: 415 (270), up 53.7%; 3152 (2570), up 22.6%
Retirement village units: 85 (59), up 44.1%; 1856 (2037), down 8.9%
Suburban townhouses & flats: 427 (393), up 8.7%; 4694 (4093), up 14.7%
Standalone share of consents: 66.5% (72.4%), 68.6% (71%)
Apartments share of consents: 15% (10.3%), 10.2% (8.6%)
Suburban townhouses & flats share of consents: 15.4% (15%), 15.2% (13.6%)

Consents for new homes in the Auckland region rose 6.4% this September compared to last, and 3.6% for the year.

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

Region: 868 (816, revised up from 752), 10,317 (9960)
Rodney: 58 (64), 1018 (931)
Albany: 183 (270, revised up from 206), 2449 (2300)
North Shore: 37 (110), 427 (609)
Waitakere: 81(47), 578 (601)
Waitemata & Gulf: 192 (33), 1130 (1061)
Whau: 11 (14), 293 (307)
Albert-Eden-Roskill: 18 (15), 801 (625)
Orakei: 13 (15), 246 (357)
Maungakiekie-Tamaki: 54 (20), 635 (351)
Howick: 48 (32), 410 (588)
Manukau: 27 (29), 430 (411)
Manurewa-Papakura: 87 (91), 948 (1015)
Franklin: 59 (76), 952 (804)

The regions consenting the most new homes in the September 2017 year were:

Auckland: 10,317 (up 2.9% from a revised figure for the September 2016 year, up 3.6% on the original)
Canterbury: 5122 (down 18% as the post-quake rebuild continues to wind down, but still at a historically high level)
Waikato: 3596 (up 1.7%)
Bay of Plenty: 2596 (up 4.8%).

Non-residential building consents constituted 31.9% of the total market in September, down from 32.4% for the previous 12 months, and 30.4% for September, down from 31.9% a year earlier.

All construction for September compared to September last year, and the latest 12 months compared to the previous 12 months:
Total: $1.799 billion ($1.598 billion), up 12.5%; $20.1 billion ($18.71 billion), up 7.5%
Non-residential: $546 million ($509 million), up 7.4%; $6.413 billion ($6.053 billion), up 5.9%.

Related stories:
Today: 10% becomes 5.9%, just like that
2 October 2017: Monthly building consents up on a few spikes, annual growth sluggish

Attribution: Statistics NZ tables & release.

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10% becomes 5.9%, just like that

This little snippet at the foot of today’s building consents release from Statistics NZ shows how kind I was to readers and to statisticians by declining to use seasonally adjusted figures many years ago.

In a note to today’s release, Statistics NZ said: “We have improved the way we calculate the seasonally adjusted number of new homes consented. We now include an adjustment for the timing of Easter. As a result, the seasonally adjusted increase in the number of new homes consented in August 2017 has been revised down from 10% to 5.9%.”

For its latest seasonal adjustment calculations, Statistics NZ said: “The seasonally adjusted number of new dwellings consented fell 2.3%, following a 5.9% rise in August. For houses only, the seasonally adjusted number fell 1.7%, following a 3.1% fall in August.

“The trend for the number of new dwellings consented increased, and is at its highest level since early 2004.”

I haven’t gone back to Statistics NZ to ask what Easter has to do with August. Such a large revision – what looks like an admission of a 41% miscalculation, and lacking a real, credible explanation – will keep me wary of these adjustments for some time yet.

In these columns, you’ll continue to get comparisons from year to year, one month against the same month. Or, as I noted in May 2008, my solution when I quoted then-Government Statistician Geoff Bascand, showing the difficulty Statistics NZ had with seasonal adjustments: “The earlier occurrence of the Easter holidays in March, rather than April, may have contributed to this increase, although the exact effect is difficult to measure.”

My solution was to lump the 2 months together, March + April, when comparing hotel occupancy, for example.

But the changes are refreshing

Government Statistician Liz MacPherson warned of this month’s change in the September release on building consents, under the heading Upcoming changes to seasonally adjusted & trend series. I’ve repeated her message below:

“We are improving the way we calculate the seasonally adjusted & trend series in building consents issued. These changes will be introduced in the September 2017 release (published on 31 October 2017).

“All seasonally adjusted series will now include an adjustment for the timing of Easter. This will account for when Easter moves between March & April. This change will affect the entire time series.

“We are also updating the way we treat outliers in the trend for the value of non-residential building consents. Currently, we exclude consents with a value of $50 million or more from the calculation of the trend. This threshold will be increased to $100 million, backdated to 2006. Currently, these outliers are only excluded from the monthly trend. For consistency, we will now also exclude these outliers from the quarterly trend.”

Despite my scepticism about some calculations, I’m enjoying the changes emanating under new leadership at Statistics NZ. They’re aimed at giving more people better information that they can use – a worthy cause.

Link:
Statistics NZ: Building consents issued seasonal adjustment and trend changes in September 2017

Related story today: New home consents jammed in 1000/year range

Earlier stories:
2 October 2017: A new understanding of seasonal adjustment
13 May 2008: Campers lift March accommodation use, but hotel & motel occupancy down
1 February 2008: Statistics, lies & don’t knows
2 September 2006: Pick an apple, an orange and you can concoct statistical fruitcake
13 May 2006: Late Easter takes March occupancy down
8 May 2006: Don’t believe everything you read…

Attribution: Statistics NZ release.

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Statistics House demolition confirmed

CentrePort Ltd confirmed yesterday that Statistics House in Wellington would be demolished because of damage sustained in last November’s Kaikoura earthquake, now that insurers have decided the building is not economically viable to repair.

CentrePort will apply to Wellington City Council for consents to safely demolish the 5-storey office block. Chief executive Derek Nind said: “We’re pleased to have final certainty on the matter and will start planning for the building’s removal, working with our tenants, neighbours & other key stakeholders for its safe demolition.”

CentrePort is still working with its engineers & insurers on the status of the BNZ building.

Government Statistician & Statistics NZ chief executive Liz MacPherson welcomed an end to the uncertainty: “This announcement by CentrePort means we can draw a line under our past connection with Statistics House. Stats NZ staff have been progressively moving on, both physically & mentally, from Statistics House after the quake 11 months ago.

“We will be forever thankful that the quake happened just after midnight last November when nobody was in the building, rather than at midday during the work week.”

She said Statistics NZ was fully insured and was still working with insurers to determine a settlement. Staff have occupied other buildings in central Wellington since late 2016 and have leases in place for at least another year.

The Government Property Group is looking more broadly at accommodation for Wellington-based agencies, including Statistics NZ.

Attribution: CentrePort & Statistics NZ releases.

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Monthly building consents up on a few spikes, annual growth sluggish

The building consent figures for new homes issued on Friday were a comparative bright spot. Full figures including comparisons with last year are at the foot, below what I hope is an interactive graph.

Statistics NZ (which now calls itself Stats NZ) said 30,736 new homes were consented in the August 2017 year, compared with previous peaks of 33,251 in the June 2004 year and 40,025 in the February 1974 year.

Stats NZ said: “Monthly building consents for new homes reached a 13-year-high in August 2017, driven by a spike in apartments & retirement village units in Auckland.”

First, it’s not a record.

Second, it’s not enough.

Third, pricing remains askew.

The 3166 consents for new homes were up by 404 on the previous month and by 332 on the previous August. The increases involved several “spikes”, none of which involved standalone housing.

Of Stats NZ’s 4 categories for new homes:

  • Standalone house consents were up by 125 from July and 10 from last August to 2025
  • Apartment consents were up by 17 from July and 152 from last August to 384
  • Retirement village unit consents were up by 150 from July and 223 from last August to 295
  • Suburban townhouse & flat consents were up by 112 from July but down by 53 from last August to 462.

The total floor area was up 14.6% to 550,000m² from 480,000m² in July & 7.2% from 513,000m² last August (Stats NZ said 7.1%), on a number of consents up 14.6% from the 2762 in July and up 11.7% on the 2834 last August. I used to calculate precise shifts in size & costs until Stats NZ explained that the staging of consents for apartment developments, but not the precise matching of costs, meant my calculations were wrong.

In theory, more homes for a smaller increase in floor area would mean the average size/dwelling has fallen, which makes sense given increases in more intensive living quarters, but it’s too hard to calculate from these figures.

Consents for houses in August were just behind those for May (2025 versus 2039) and well ahead of any other month in the last year.

The intensive sectors

The apartments picture looks strong in the last 2 months (367 in July, 384 in August), and the retirement village segment of the market had its biggest month since November 2015 (295, versus 321 in that standout 2015 month).

The intensive housing sector that’s been strongest is suburban townhouses & flats, running well above 300/month in every month except 2 (December & January last summer) since January 2016, and topping 500 twice. Last August was one of those 2 plus-500 months, so the comparative decline to 462 this August is not exactly a fall in the overall context.

Context for the 13-year high

Statistics NZ’s comparison with a monthly figure 13 years ago also needs to be put into context.

Over the last 2 years, total consents for new homes have fallen below 2000 only in January (so twice), and this is the second time they’ve exceeded 3000 (3005 last November, 3166 this August).

If you check back to my February 2005 story (link below), you’ll see consents for new homes that January fell below 2000/month for the first time since February 2003 – another 2-year run of plus-2000s.

The added ingredient: the population rises

Over the 5-year census period 2001-06, the New Zealand population rose by 273,000 to 4.18 million (up an average 54,600/year). It’s now at 4.821 million (up an average 63,600/year over 10 years, or 16.5%/year more than during 2001-06).

At an average 2.7 persons/household, the extra population since 2006 needed an average 23,600 more houses/year, compared to 20,200/year more in the previous 5 years, so a 15.3%/year increase in construction required.

Those averages come with bumps, declines & cycles, and for several months the net inflow of migrants alone has been above 70,000/year. The total population has risen over the last 3 years by 83,000, then 100,000, and this year by 120,000 – and that most recent increase equates to demand for 44,400 homes.

The regulatory & banking responses

Not surprisingly, that huge excess of need over construction encourages speculation. The New Zealand answer, via regulators, has been to create measures discouraging speculation. Construction has been slow to rise.

As I wrote 2 months ago: “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.”

The latest annual figure for consents is 30,736, up just 3.7% on the previous 12 months and enough to cover the population rise of 2 years ago (assuming nothing is demolished and every home newly consented is built).

More intensification, or more difficult?

A feature of the latest consent figures is the 24.8% rise in apartment consents for the last 12 months, from 2409 to 3007. At the bottom of the global financial crisis downturn, 673 apartments were consented in the 12 months to August 2012.

Figures up to February 2015 are not easily compared to those before, because Stats NZ went from 2 categories – apartments in one, including retirement village units, all other housing in the other, seemingly including suburban townhouses & flats in the second category. From March 2015, the statistics were broken into the present 4 categories – houses, apartments, retirement villages, townhouses & flats.

In the 12 months to January 2005, consents were issued for 6065 apartments, up 23.5% on the previous year, in the second 12 months of an immigration spike. That figure was probably for apartments including retirement village units. Since then, intensification has been advocated more & more strongly, promoted, and the tally for all 3 intensive categories for the last 12 months is 9497 units, up 12.5% from 8439 in the previous 12 months.

The questionmarks

But there is a big questionmark over how many of those consents will turn into completed units, because of regulatory clampdowns on investors (including foreign investors) and impacts on first-homebuyers, including banking changes as both the Australian banks & banks in New Zealand (the big 4 owned from Australia) deal with tighter capital adequacy ratios.

One impact hard to spot from outside the finance sector is the size of apartment that a bank will lend on. A small upward shift in bankable unit size can make a one-bedroom unit impossible to buy, and can increase demand for 2-bedroom units, cutting the value of the smaller units (but not necessarily making them a buyable product) and increasing the value of the larger units.

Equally, there are questionmarks over how much immigration will be allowed, depending on who gets to become the NZ Government, and how much emigration there might be as Australia’s economy picks up, particularly in Melbourne construction & the mining sector.

Auckland consents up but slowing

Stats NZ started providing regional consent figures in 1991, and said on Friday 10,265 new homes were consented in Auckland in the August 2017 year, well short of the peak 12,937 in the June 2004 year.

The latest 12-month tally is up 4.2% from 9851 in the previous 12 months and up 19.2% from 8615 in the 12 months to August 2015. So, still rising but slowing, while demand continues to surge.

[The graph below is interactive on the Stats NZ website, and they’ve provided the code to make it interactive here, but it appears I have to use some special fingers as well as thumbs to make it work. Loads of comparative statistics lie below it.]

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

Total consents for new homes: 3166 (2834), up 11.7%; 30,736 (29,627), up 3.7%
Total values for new homes:  $1.37 billion ($1.18 billion), up 16.2%; $13.12 billion ($12.06 billion), up 8.7%
Standalone homes: 2025 (2015), up 0.5%; 21,239 (21,188), up 0.2%
Apartments: 384 (232), up 65.5%; 3007 (2409), up 24.8%
Retirement village units: 295 (72), up 310%; 1830 (2084), down 12.2%
Suburban townhouses & flats: 462 (515), down 10.3%; 4660 (3946), up 18.1%
Standalone share of consents: 64% (71.1%), 69.1% (71.5%)
Suburban townhouses & flats share of consents: 14.6% (18.2%), 15.2% (13.3%)

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 August, compared to August last year, and the latest 12 months compared to the previous 12 months:

Region: 1184 (970), 10,265 (9851)
Rodney: 92 (72), 1024 (953)
Albany: 249 (242), 3036 (2273)
North Shore: 19 (35), 500 (519)
Waitakere: 36 (68), 544 (593)
Waitemata & Gulf: 150 (49), 971 (1061)
Whau: 16 (73), 296 (303)
Albert-Eden-Roskill: 115 (117), 798 (632)
Orakei: 14 (21), 248 (357)
Maungakiekie-Tamaki: 164 (45), 601 (344)
Howick: 73 (42), 394 (585)
Manukau: 48 (20), 432 (441)
Manurewa-Papakura: 115 (112), 952 (1015)
Franklin: 93 (74), 969 (775)

All construction for August compared to August last year, and the latest 12 months compared to the previous 12 months:
Total: $2.127 billion ($1.745 billion), up 21.9%; $19.9 billion ($18.68 billion), up 6.6%
Non-residential: $706 million ($534 million), up 32.3%; $6.375 billion ($6.163 billion), up 3.4%%

Earlier stories:
28 February 2005: Auckland consents tumble in January, average construction cost surges
28 January 2005: Residential construction value up 92% in 4 years, average construction cost up 24%
30 July 2004: Residential growth continues at phenomenal rate in June

Attribution: Statistics NZ tables & release.

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A new understanding of seasonal adjustment

For most of the 18-year lifespan of this website, I’ve steered clear of using Statistics NZ’s seasonally adjusted figures, after attending a seminar where a senior statistician admitted they didn’t know how to deal with Easter.

I also steered clear of US statistics altogether when I discovered the US Bureau of Census & Statistics (now with a similar but slightly different name) used seasonal adjustment on a figures done on a sample base – double jeopardy.

Although you might think this annual event, Easter – with a date known long into the distant future – is something about which everything can be predicted reasonably accurately, and after which accurate comparisons can be made, apparently this was not so.

If they don’t know that, I thought, I’m not going to give you seasonally adjusted figures because they’ll just be guesswork.

Government Statistician Liz MacPherson.

But as a postscript to the monthly building consent figures on Friday, Government Statistician Liz MacPherson added this missive:

Upcoming changes to seasonally adjusted & trend series

“We are improving the way we calculate the seasonally adjusted & trend series in building consents issued. These changes will be introduced in the September 2017 release (published on 31 October 2017).

“All seasonally adjusted series will now include an adjustment for the timing of Easter. This will account for when Easter moves between March & April. This change will affect the entire time series.

“We are also updating the way we treat outliers in the trend for the value of non-residential building consents. Currently, we exclude consents with a value of $50 million or more from the calculation of the trend. This threshold will be increased to $100 million, backdated to 2006.

“Currently, these outliers are only excluded from the monthly trend. For consistency, we will now also exclude these outliers from the quarterly trend.”

About Liz MacPherson:

The Statistics NZ website says: “Liz is passionate about evidence-driven decision-making and sees her role is to ensure New Zealand decision-makers at all levels have access to quality information.

Her view: “Statistics are only valuable if people use them. We collect & analyse them, and it’s vital we make them available in the ways people want them.

“We want the outside world to know what data we have and to use it. If we understand our customers’ needs, we can produce more relevant products & services that are used to make better decisions.

“If we understand our suppliers’ environment, we can better manage their delivery of data and negotiate solutions.

“If we understand what drives our stakeholders, we can collaborate for success.”

After senior roles over 20 years at the Department of Labour, the Ministry of Economic Development and the Ministry of Business, Innovation & Employment (MBIE), Ms MacPherson was appointed Government Statistician & chief executive of Statistics NZ in August 2013.

Every month, as you can see this month, Statistics NZ adds to the changes and the supply of information improves, despite the difficulties the organisation has faced following the Christchurch earthquakes, and again as a result of last year’s Kaikoura quake, which rendered Statistics House in Wellington unoccupiable.

Here’s one of those improvements introduced in July:

We’re making Stats NZ data easier to find

“This release is also available on our beta site, where we’re testing new formats for information releases & news. Help us make data easier to find by visiting the site, reviewing the content that matters to you, and sending us feedback.”

A change last month was to provide interactive charts. One I’ve used today comes with the code to make it work on this website as well as Statistics NZ’s – but, for the moment at least, the interactivity doesn’t work here:

Attribution: Statistics NZ releases.

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Home construction remains strong, non-residential slips

Warning: The item below contains a lot of dollar figures & percentages on work completed in the construction sector, hopefully put in perspective.

First, the positive figures for the 12 months through to the June quarter: all work put in place was up $2.6 billion on the previous 12 months to $20.6 billion. Work on new homes was up $1.7 billion to $11 billion, and all residential work was up $1.9 billion to $13.28 billion. Non-residential work rose by $700 million to $7.3 billion.

Work put in place during the latest quarter totalled $5.16 billion – $2.79 billion for new homes, $567 million for other residential work, $1.8 for non-residential.

Now, the percentage shifts.

After strong completion rates right through 2016, building work put in place nationally slumped (comparatively) in the March quarter of this year and growth was low in the June quarter.

Non-residential building work completed in the March quarter was up 5.1% on that quarter in 2016, but fell to 0.2% growth in the June quarter.

Work on new homes rose by 18.9% in the March quarter last year, and then by 26.4%, 27.6% & 24.1% in the next 3 quarters. This year, the growth rate wasn’t sustained but was still positive, falling to 14.8% in the first quarter and to 8.9% in the second.

Those shrinkages took total growth in the first quarter down to 10.9%, and to 4.9% in the second quarter.

On an annual basis, the fall is less visible because the rates of construction are still being held up by the 2016 growth. In the residential sector, after strong growth in 2014 (33.5% in the June 2014 quarter), growth tumbled in mid-2015 to a 9.3% increase in the second quarter and 6.6% in the third. The annual growth rate slipped to 15.9% in the June 2016 year, but rose to 18.4% in the latest 12-month period.

Now, in dollars.

In dollar terms, total work put in place has risen to a new level over the last 4 quarters, from a range down at $3.7 billion in the June 2014 quarter, climbing to $4.9 billion in the June 2016 quarter. Over the last 4 quarters, total work put in place fell just short of $5 billion ($4.935 billion) in the March quarter but was otherwise over $4 billion, reaching $5.157 billion in the latest quarter.

Non-residential work, down at $1.4 billion in early 2015, climbed above $1.6 billion/quarter in 2016, reaching $1.94 billion in the final quarter of the year. This year, non-residential work slipped to $1.68 billion in the first quarter but rose to $1.8 billion in the second.

Work on new homes has been above $2.7 billion/quarter for all the last 4 quarters – $2.8 billion in the December quarter & $2.79 billion in the June 2017 quarter. Annually, that has seen work on new homes rise by $1.7 billion in the last 12 months to $11 billion, and all residential work (including additions & alterations) rise by $1.9 billion to $13.28 billion.

Canterbury winds down, Auckland ramps up

Canterbury’s post-earthquake residential rebuild kept total construction there above $1 billion for every quarter since June 2014, but the total fell to $998 million in the latest quarter.

In Auckland, total work put in place went over the $1 billion mark in the September 2013 quarter, went over $1.5 billion in March 2016 and fell just short of $2 billion ($1.985 billion) in December. This year, it was down to $1.76 billion in the first quarter and back up to $1.95 billion in the second quarter.

Attribution: Statistics NZ tables.

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