About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, November 21st, 10:33AM
rss
Latest Headlines

Costs impact on consents

Rising construction costs are putting a brake on construction activity and that’s being reflected in muted growth in consents issuance.

Friday, March 2nd 2018, 12:00PM

by Miriam Bell

New Statistics NZ data shows there were 1,916 new dwellings consents issued nationwide in January which, once seasonally adjusted, was a modest rise of 0.2% on December 2017.

This comes on the back of recent volatility: there was a 9.4% increase in consents issuance issuance in November followed by a 9.5% fall in December.

Stats NZ construction statistics manager Melissa McKenzie says that recent volatility aside, overall consent numbers are fairly flat, and levels remain below both recent and historic peaks.

But January is typically a quiet month for consents and this January was up on the previous few, she says.

“Further, there were 31,251 homes consented in New Zealand in the year ended January 2018, up 3.7% from the previous January year, with the growth driven by more consents for apartments.”

In supply-strapped Auckland, 718 new dwellings were consented in January.

This is down from the average of 900 consents a month over the past year but up on January 2017 when 512 new dwellings were consented.

In the year ended January 2018, Auckland consented 11,073 new homes.

While economists still see an upward trend in consents issuances, they are concerned about the impact of cost pressures in the construction industry.

Westpac senior economist Satish Ranchhod says it is worth noting that annual consent issuance in Auckland remains firm and that, over the past year, was at its highest level since 2005.

They expect that the overall level of residential building activity will remain elevated for some time and that it is set to increase at a gradual pace over the next few years, he says.

“But, as we’ve highlighted for some time, rising costs, as well as difficulties sourcing skilled labour and credit have provided a brake on activity.

“Consistent with this, annual consent issuance has failed to break materially higher over the past year.”

ASB economists agree, saying residential activity looks to have weakened on a trend basis despite the slight January lift in consent issuance.

They say the change in government and uncertainty around the new KiwiBuild policy is likely to have contributed to a decline in consents, as some developers may hold back on construction plans.

“As such, there is there is the strong possibility that this lull is temporary. But, with net immigration remaining elevated, the pipeline of future work looks to be growing. 

“This appears to be particularly acute in Auckland and Wellington, where we expect tight housing supply will likely lead to ongoing pressure on rents, and to a lesser extent house prices.”

They remain concerned about whether there is sufficient capacity in the sector to be able to meet this higher activity, while containing cost pressures in the sector.

“Our estimates suggest that annual residential construction cost inflation rose to around 6.5% in the 3-months to February.”

This situation is of particular concern in Auckland which is generally estimated to have a shortage of around 35,000 homes.

That means the city needs to have at least 11,000 to 12,000 new dwellings built each year for supply to keep pace with demand.

 

« Free Investment Property Showcase Events: Auckland, Wellington and ChristchurchSellers lower price expectations »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Details confirmed for transitional licensing
    “And the other requirement is to have an internal complaint process as set out in the licence conditions. It’s good to see...”
    3 hours ago by Mr Slater
  • When is a client really a client?
    “And this subtle upgrade to the understanding of a complaint. Which changes the ISO definition from an expression of dissatisfaction...”
    3 days ago by JPHale
  • When is a client really a client?
    “Just released additional standards from the FMA. Record keeping potentially until 7 years after the death of the life...”
    3 days ago by JPHale
  • When is a client really a client?
    “@ReganT interesting that the two life advisers involved with the code working group discussion are the ones being argued...”
    3 days ago by JPHale
  • When is a client really a client?
    “In a previous reply I responded to the concept of payment as a trigger. I actually agree it’s not. While we don’t often...”
    4 days ago by regant
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 ▼3.89 ▲4.05 4.39
ASB Bank Special - ▼3.39 ▲3.55 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.02 4.09 4.39

Last updated: 21 November 2019 9:39am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com