tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Wednesday, April 24th, 6:36PM

News

rss
Latest Headlines

Covid-19 fog hangs over consents increase

New dwelling consents were up by 20% year-on-year in June. That’s a big increase but it doesn’t allay the concerns of economists going forward.

Thursday, July 30th 2020, 4:00PM 1 Comment

by Miriam Bell

There were 3,477 new dwellings consents issued in June, which was an increase of 20% on the number issued in June 2019, according to Stats NZ’s latest data.

While there was a mere 0.5% rise in consents from May, annual consents for the June 2020 year ticked up to 37,614 – which means issuance remains at record levels.

Stats NZ acting construction indicators manager Dave Adair says while there was a fall in consents in April during alert level four lockdown, it was followed by a high number of consents in May and June.

But currently there is uncertainty around consent numbers due to the wide-ranging implications of Covid-19.

"Although many new homes are built within a year of gaining consent… we will have to wait before any changes to the actual supply of homes are noticeable, including insights into completion rates."

While June’s strength in consent issuance impressed economists, they also remain concerned about the uncertainties surrounding the construction industry going forward.

Westpac senior economist Satish Ranchhod says consents are running at levels not seen since the 1970s – and that is even more impressive given the disruptions to consent processing since in the level four lockdown.

“Looking across regions, consent issuance in Auckland remains strong with 14,780 new dwellings consented over the past year. That pace of issuance will allow home building in Auckland to catch up with the strong growth in its population in recent years.”

With a large number of new dwellings being consented over the past year, he expects that residential construction levels will remain firm through the back half of the year. Increased spending on home renovations will also help to support employment in the building sector, Ranchhod says.

“However, as we look to the year ahead, we expect that uncertainty around the outlook will see fewer new housing projects being consented. That trend will be reinforced by the sharp downturn in net migration and population growth already in train.”

For ASB senior economist Mark Smith, it will take several more months for the Covid-19 fog to clear - but, in underlying terms, regional consent issuance looks to have held up well, all things considered.

Over the coming months, he expects construction activity to pick up to complete projects which were underway prior to the lock down and to address a sizeable pipeline of consented work that needs to be done.

“Further ahead, the deep recession for 2020 (we expect a 5% fall in GDP) and a subdued demand environment (despite record low mortgage interest rates) are expected to soften construction demand and result in some construction projects being cancelled.”

There could be potentially longer-lasting impacts on construction activity if New Zealand’s borders stay shut or the shift in work patterns observed during Covid-19 becomes more entrenched, Smith adds.

Tags: ASB Auckland building consents construction coronavirus Covid-19 housing market housing shortage investment market outlook property investment real estate recession Westpac

« New urban planning rules for CouncilsPrices not impacted by new listings surge »

Special Offers

Comments from our readers

On 1 August 2020 at 7:16 pm FJ said:
As always economists are quick to change there outlook as the current financial climate evolves or changes. Reality is ....they dont know! None of us do. Its down to your own experience and agenda ( Doing your own research is absolutely vital). My own experience could tell me that consents are rising because the average person could quite easily work out that building is actually cheaper or similar to paying exorbitant existing home prices, as long as you have land...and obviously they do. In addition, the construction industry will continue, NZ is in a prime position to attract some of the worlds best and most qualified people, so infrastructure will need to continue on this basis. We are now one of the most sought after countries to live.....yes it will be expensive to live here.....and?

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 ▲6.89 ▲6.55 ▲6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 ▼7.29 ▼6.59
SBS Bank Special - 7.24 ▼6.69 ▼5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.29 6.65

Last updated: 24 April 2024 9:24am

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