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Apartment consents slump

A big drop in apartment consents has driven a fall in dwellings consents overall in October, new data reveals – but there’s better news for Auckland.

Thursday, November 30th 2017, 11:00AM

by Miriam Bell

Statistics NZ figures show that just 78 apartments were consented in October 2017, which was a decline of 66% on October 2016.

Construction statistics manager Melissa McKenzie says that apartments tend to be really volatile from month to month.

“October’s figure is the lowest number we have seen since April 2016, although we know there are more apartments in the pipeline.

“We don’t include dwellings in the consent statistics until the final stages of work are consented, when we get the highest value for the project."

The slump in apartment consents meant there was a fall in dwelling consents issued overall for the second consecutive month in October.

Once seasonally adjusted, the number of dwelling consents was down by 9.6% in October. This came on top of a 2.5% drop in September.

Despite this, the data shows that monthly consents for Auckland held up well, with 944 new dwellings consented in October.

This was due to increases in consents for stand-alone houses, retirement village units and townhouses, particularly in Howick, Manukau, and North Shore.

ASB senior economist Jane Turner says Auckland building demand was relatively resilient in October, rising 2.7% over the month following the previous month’s 11% fall. 

“This is consistent with our view that Auckland’s house building activity is likely to remain elevated at historically high levels, but further growth will be limited.”

It appears soft apartment consent issuance in Wellington was a key driver of October’s weakness, along with slowing regional demand for new housing construction, she says.

ASB thinks that housing construction demand in the regions has peaked, but they do expect a trend increase in Wellington housing construction demand due to the region’s growing undersupply.

“While we remain upbeat about the housing construction outlooks in Auckland and Wellington, there may be some near-term weakness as a result of uncertainty from the change in government,” Turner says.

“In particular, property developers may choose to wait on the side lines for more details around the KiwiBuild programme and how that could affect demand for future developments.”

However, Westpac senior economist Satish Ranchhod expects overall construction levels will increase only gradually over the next few years.

He says that’s because overall consent issuance has been close to flat for a year due to difficulties sourcing skilled labour and credit have provided a brake on activity.

What’s been happening in Auckland, where concerns about a housing shortage are most acute, is notable though, Ranchhod says.

“Issuance in our largest city picked up back in August. And while it has eased back a little, most of those earlier gains have been sustained.

“In fact, if Auckland can the current monthly pace, it would finally start eating into its significant shortfall of housing (albeit, very gradually).”

Headwinds for the construction sector are likely to bite hardest in Auckland but the region’s consent trend development remains positive, he adds.

 

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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

Last updated: 10 July 2020 9:02am

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