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Slowing consent trend a concern

Dwelling consents may have just hit a new high, but the trend is slowing – and that’s a worry, particularly for supply-strapped Auckland, economists say.

Thursday, January 19th 2017, 12:30PM

by Miriam Bell

Statistics New Zealand has just released its latest consent data and it shows that the number of new dwellings consented nationally was 2,973 in November 2016.

This was a 5% increase on November 2015 and an 11 year high.

However, once seasonally adjusted, the number of new consents fell by 9.2% as compared to October 2016.

Further, Statistics New Zealand noted that the trend was showing signs of decreasing after reaching a 12-year high in mid-2016.

Statistics New Zealand business indicators manager Melissa McKenzie said that Auckland was the region that consented the most new dwellings in November (1,156).

“Almost 40% of the new homes consented were in Auckland. The Waitemata and Gulf, Albert-Eden-Roskill, and Manukau wards had the biggest increases in the Auckland region.”

The Auckland region was followed by Canterbury (459) and the Waikato (340).

Over the year ending November 2016, 30,303 new dwellings were consented in New Zealand, which was a year-on-year increase of 13%.

In Auckland, 10,137 new dwellings were consented over the year, which was also a year-on-year increase of 13%.

But while new consent numbers might be up, economists are concerned that the overall trend in consent issuance has been slowing.

ASB senior economist Jane Turner said construction activity remains a key driving force of New Zealand’s economic growth. 

While November residential consent issuance fell due to earthquake disruption, the trend had already been slowing which is of some concern, she said.

“Strong population growth over the past few years has lifted housing demand right across the country, and we expected momentum to continue at least for another year.”

While Auckland consents lifted 6%, according to ASB’s seasonally-adjusted estimate, it was on the back of a large chunk of apartment and retirement village unit consents, she said.

“The trend in Auckland stand-alone housing consents appears to be slowing, a sign that developers are starting to respond with more high-density solutions in Auckland.”

Westpac senior economist Satish Ranchhod was more worried about the situation in Auckland.

He said that with dwelling consent issuance in Auckland up 6% in November, it took the total number of new dwellings consented over the past year to just over 10,100.

“This is still below the level Auckland needs in light of the region’s strong population growth and existing housing shortage.

“More concerning, the trend in dwelling consent issuance in Auckland appears to have flattened off.”

It is generally estimated that Auckland needs between 11,000 and 13,000 new dwellings built every year for the next decade to address its shortage and keep up with demand.

Around the rest of the country, consents were down in Wellington in November, but this was said to be due to the Kaikoura earthquake that month.

In Canterbury, consent issuance picked up in November, but it is expected to trend down as the Christchurch residential rebuild winds up.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

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