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Auckland consents falling short

No relief in sight for Auckland’s supply shortage as new data shows the dwelling consents trend is still stumbling along, with a drop in June.

Monday, July 31st 2017, 12:30PM

by Miriam Bell

The number of new dwelling consents issued nationally fell by 1.0%, once seasonally adjusted, in June, according to the latest Statistics New Zealand data.

This came on the back of a surprise increase of 6.9%, once seasonally adjusted, in consents issuance in May.

Overall, consents for 2,560 new dwellings were issued in June, with nearly half (906) of those for the Auckland region.

Statistics New Zealand spokesperson Jason Attewell said that 30,453 new houses, apartments, townhouses, and flats were consented in the year to June, which was a 4.7% year-on-year increase.

The trend for the number of new dwellings consented is increasing although this is not yet reflected at a regional level, he said.

"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 a year.”

One-third (10,364) of all new homes consented across the country were in Auckland in the June 2017 year, Attewell said.

Further, Auckland accounted for three-quarters of national new apartment units and nearly half of all townhouses, flats, and units.

“Auckland's increases in these home types were partly offset by a fall in the number of new stand-alone houses in Auckland in the latest year.”

However, the number of new dwellings consented for Auckland in June was less than the 921 issued in June last year and well down on the peak of 1,189 in November last year.

This has left some commentators pointing out these numbers are not high enough to address the region’s supply shortfall.

Westpac senior economist Satish Ranchhod said that, over the past six months, consent issuance nationally has been fairly flat and that Auckland was seeing only gradual increases.

Just over 10,300 new dwellings were consented in Auckland over the past year, he said.

“While that does include a trend increase in multi-unit consents (such as apartment and townhouses), it is still below what is needed to keep up with population growth.

“With increasing reports of capacity constraints in the building industry, this signals that the supply shortfall in Auckland is likely to get worse before it gets better.”

It is generally estimated that Auckland has a shortage of around 35,000 homes and needs to have 11,000 to 12,000 built each year for supply to keep pace with demand.

Consent issuance is likely to continue to rise over the next few years, Ranchhod said.

But construction industry capacity constraints mean the pickup in construction is likely to be gradual and protracted.

ASB senior economist Jane Turner said that consents can be volatile month to month, and this was particularly evident in consents for town houses, which lifted strongly in May and fell back in June. 

"Looking beyond the volatility, we are seeing encouraging signs that residential building demand is lifting in Auckland and Wellington (up 20% year-on-year).”

Read more:

Consents trend recovering 

Shortfall to get worse before it gets better 

« Free Investment Property Showcase Events: Auckland, Wellington and ChristchurchFewer houses coming on to market »

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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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