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Consents at 44 year high

New dwelling consents are now at the highest level since 1975 but economists say that it’s likely they have reached their peak.

Friday, March 1st 2019, 12:58PM

by Miriam Bell

A total of 33,576 new dwellings were consented nationwide in the year ending January 2019, according to the latest data from Stats NZ.

Once seasonally adjusted, this was an increase of 17% in January 2019.

Further, in the month of January 2496 new dwelling consents were issued, which was an increase of 30.3%, as compared to January last year.

Stats NZ construction statistics manager Melissa McKenzie says the number of new homes consented this year is at its highest level since early 1975.

“However, the population was only around three million in the 1970s, compared with nearly five million today.

“That means that while approximately 13 new homes were consented per 1,000 New Zealanders at the 1970s peak, around seven per 1,000 were consented in the year ended January 2019. “

The growth in new dwelling consents was driven by an increase in large multi-unit projects such as apartments, especially in Auckland.

In Auckland alone, 13,272 new dwellings were consented in the year ending January 2019. This was up 20% on the January 2018 year and is at similar levels to the 1970s peak.

This highlights the strength of Auckland construction, which was also illustrated by recent Auckland Council data showing the region saw a record 10,637 dwellings completed in the year to December 2018.

ASB senior economist Jane Turner says house building activity is set to be very strong over the first half of the year in Auckland.  

The Stats NZ results are very encouraging from the perspective of Auckland’s underlying housing shortage, she says.

“Although Stats NZ’s new net migration estimates indicate the population growth may not be as high as previously thought, we still believe that Auckland is likely to have an underlying shortage of around 20,000 dwellings. 

“We still see this as taking many years for Auckland’s housing supply to catch up to population needs.”

But Turner says Auckland’s housing shortage has spread beyond Auckland and is now resulting in tight housing markets in many of the regions. 

“Strong regional population growth has underpinned an increased need for new housing and we expect house building activity to hold up at high levels right across the country over 2019.”

“With housing construction (and other types of construction) at high levels, construction resources are strained and this may limit the growth in housing building activity.”

Westpac senior economist Satish Ranchhod agrees, saying that house building activity has likely reached its peak with consent issuance now running broadly in line with population growth.

“On top of that we’re seeing population growth slow as migration has fallen, and a cooling in the housing market is on the cards over the next few years in response to policy changes.

“Together, those conditions signal a significantly different environment for construction activity than we saw in recent years.”

Beyond 2019 residential construction activity is likely to flatten off or even decline slightly, he adds.

 

Tags: ASB building consents housing market housing shortage Stats NZ Westpac

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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 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 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 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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