Archive | Building consents

Home construction remains strong, non-residential slips

Warning: The item below contains a lot of dollar figures & percentages on work completed in the construction sector, hopefully put in perspective.

First, the positive figures for the 12 months through to the June quarter: all work put in place was up $2.6 billion on the previous 12 months to $20.6 billion. Work on new homes was up $1.7 billion to $11 billion, and all residential work was up $1.9 billion to $13.28 billion. Non-residential work rose by $700 million to $7.3 billion.

Work put in place during the latest quarter totalled $5.16 billion – $2.79 billion for new homes, $567 million for other residential work, $1.8 for non-residential.

Now, the percentage shifts.

After strong completion rates right through 2016, building work put in place nationally slumped (comparatively) in the March quarter of this year and growth was low in the June quarter.

Non-residential building work completed in the March quarter was up 5.1% on that quarter in 2016, but fell to 0.2% growth in the June quarter.

Work on new homes rose by 18.9% in the March quarter last year, and then by 26.4%, 27.6% & 24.1% in the next 3 quarters. This year, the growth rate wasn’t sustained but was still positive, falling to 14.8% in the first quarter and to 8.9% in the second.

Those shrinkages took total growth in the first quarter down to 10.9%, and to 4.9% in the second quarter.

On an annual basis, the fall is less visible because the rates of construction are still being held up by the 2016 growth. In the residential sector, after strong growth in 2014 (33.5% in the June 2014 quarter), growth tumbled in mid-2015 to a 9.3% increase in the second quarter and 6.6% in the third. The annual growth rate slipped to 15.9% in the June 2016 year, but rose to 18.4% in the latest 12-month period.

Now, in dollars.

In dollar terms, total work put in place has risen to a new level over the last 4 quarters, from a range down at $3.7 billion in the June 2014 quarter, climbing to $4.9 billion in the June 2016 quarter. Over the last 4 quarters, total work put in place fell just short of $5 billion ($4.935 billion) in the March quarter but was otherwise over $4 billion, reaching $5.157 billion in the latest quarter.

Non-residential work, down at $1.4 billion in early 2015, climbed above $1.6 billion/quarter in 2016, reaching $1.94 billion in the final quarter of the year. This year, non-residential work slipped to $1.68 billion in the first quarter but rose to $1.8 billion in the second.

Work on new homes has been above $2.7 billion/quarter for all the last 4 quarters – $2.8 billion in the December quarter & $2.79 billion in the June 2017 quarter. Annually, that has seen work on new homes rise by $1.7 billion in the last 12 months to $11 billion, and all residential work (including additions & alterations) rise by $1.9 billion to $13.28 billion.

Canterbury winds down, Auckland ramps up

Canterbury’s post-earthquake residential rebuild kept total construction there above $1 billion for every quarter since June 2014, but the total fell to $998 million in the latest quarter.

In Auckland, total work put in place went over the $1 billion mark in the September 2013 quarter, went over $1.5 billion in March 2016 and fell just short of $2 billion ($1.985 billion) in December. This year, it was down to $1.76 billion in the first quarter and back up to $1.95 billion in the second quarter.

Attribution: Statistics NZ tables.

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Housing market share moves away from standalones, but not to apartments

Over the last 5 years, standalones’ share of residential building consents has dropped from around 80% to, in the year to July, just below 70%. The cry from intensification advocates has been “Build up, not out”, so you might suppose the fall in standalones’ market share has been taken up by apartments.

And you’d be wrong. The apartment & retirement village sectors have both been left in the shadow of the suburban townhouses & flats. The demand has been for less garden but still some space, and not too far off the ground.

The statistics don’t differentiate between houses on a full section and cross-leases, but my impression is that cross-leases (including townhouses) are replacing houses on full sections in developments following site aggregation.

These are the shares of consents for houses & townhouses/flats over the last 6 July years:

2012: houses 80.5%, townhouses 6.4%
2013: houses 81.3%, townhouses 7%
2014: houses 76%, townhouses 9.7%
2015: houses 70.6%, townhouses 13.7%
2016: houses 71.5%, townhouses 13%
2017: houses 69.8%, townhouses 15.5%

Apartments & retirement village units shared about 13% of consents in 2012, and about 15% in the last 2 years.

As construction started to grow out of the global financial crisis in 2012, apartments represented only 4% of consents that year, against 9.1% for townhouses.

In the last 2 years, those consent shares rose to 7.7% for apartments and 7.8% for retirement villages in 2016, then to 9.4% for apartments this year, but falling to 5.3% for retirement village units – despite the well publicised growth in the retirement village sector.

More change will occur in Auckland’s suburbs as a result of Auckland Council’s unitary plan replacing all the old zonings, providing for more intensification throughout the suburbs and for taller buildings in & around business centres.

NZ Retail Property Group is developing apartments above its Milford mall and also intends to intensify at Birkenhead, 2 early examples of what will become a trend. On suburban streets, small site aggregations will allow for handfuls of townhouses to be built.

Bolder developers will take on larger aggregations, so you will see bigger developments of townhouses and some apartment blocks, but the focus will remain on adult occupants rather than more space for families.

I’d like to be proven wrong on that point, but I expect it will be some time before we see the US-style condominium developments for family occupancy. The strength of that market in the US, led by large corporate owners, pushed private home ownership down to 62.9% in the second quarter of 2016, the same level it was at in the third quarter of 1965. Ownership peaked at 69.2% in 2004-05. After the 2016 decline, the St Louis Federal Reserve Bank’s index rose to 63.7% in the December 2016 & June 2017 quarters.

Statistics NZ said in 2014, on the basis of the 2013 census, that individual home ownership here fell to 49.8%, down from 53.2% in 2006. In addition, homes owned by family trusts increased from 12.3% in 2006 to 14.8% in 2013, taking the totals in private ownership to 65.5% in 2006, and 64.6% in 2013.

The New Zealand way of doing intensive developments in the last 35 years has been for developers to sell individual units, and construction quality failures don’t seem to have dented the enthusiasm for this kind of individual investment.

The retirement village model could be replicated in the apartment & townhouse development sectors, where a corporate holds ownership for medium-term occupants, but there’s no sign of that happening yet. Developers here still look on development as their function in life, not a develop-&-beyond model.

If we had a more mature sharemarket where long-term thinking was espoused, there would be a natural place for developers & corporate owners of such property, but that, too, is a long way off.

Link:
1 September 2017: Consent movement on hold

Attribution: Statistics NZ tables, St Louis Fed chart.

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Consent movement on hold

In Wednesday’s newsletter I wrote: “Figures just released by Statistics NZ – building consents for new homes down 49 in July from July last year at 2762 – a lift in standalone house consents, falls in all 3 intensive housing categories (apartments, retirement village units and suburban townhouses & units).”

The first one relates to standalone housing’s share of the residential market, but I’ve run some statistical comparisons on that in a separate item.

Here are the details from Statistics NZ’s Wednesday release of the July figures:

New home consents up in mixed year

Consents for 2762 new homes were issued nationally in July, the third highest monthly tally this year but below a purple patch of 3 months last June-August.

This year, consents have been over 2700 in 3 months, but were down at 2100 in April, so it’s been a mixed picture.

In those 3 purple months last year, 2752 consents were issued in June, 2811 in July, 2834 in August. The volumes remained high through to December, including 3005 consents issued in November.

The election and constraints by the Reserve Bank & commercial banks have been blamed for a quieter housing period, and a drastic fall in foreign buyers (mostly Chinese) for a decline in the secondary housing market.

Given those circumstances, consent figures close to those of a year ago can be regarded as healthy, but it’s hardly surprising that consent numbers for new homes were up only 4.5% for the year and down 1.7% for the month, led down by all 3 intensive segments of the new housing market.

Annual consent level stuck in narrow band

The 30,404 consents for new homes – only 320 more than for the previous 12 months – maintains the consent level in a band just above 30,000/year, which was reached last October.

The national consent numbers for July and the year to July, compared to July last year, and the latest 12 months compared to the previous 12 months:

Total consents for new homes: 2762 (2811), down 1.7%; 30,404 (29,084), up 4.5%
Total values for new homes:  $1.18 billion ($1.03 billion), up 14.1%; $12.92 billion ($11.75 billion), up 10%
Standalone homes: 1900 (1761), 21,229 (20,790)
Apartments: 367 (425), 2855 (2242)
Retirement village units: 145 (189), 1607 (2278)
Suburban townhouses & flats: 350 (436), 4713 (3774)
Standalone share of consents: 68.8% (62.6%), 69.8% (71.5%)
Suburban townhouses & flats share of consents: 12.7% (15.5%), 15.8% (13.1%)

Auckland residential consents fall 28.8% for month

Consents for new homes in the Auckland region fell 28.8% this July compared to last July, but rose by 4.5% for the year. Consents for the month rose in 6 wards and fell in 7.

Auckland residential consents for July, compared to July last year, and the latest 12 months compared to the previous 12 months:

Region: 774 (1087), 10,051 (9622)
Rodney: 83 (71), 1004 (935)
Albany: 159 (215), 2529 (2250)
North Shore: 38 (18), 516 (502)
Waitakere: 42 (72), 576 (568)
Waitemata & Gulf: 183 (353), 870 (1032)
Whau: 16 (41), 353 (252)
Albert-Eden-Roskill: 14 (55), 800 (525)
Orakei: 27 (20), 255 (366)
Maungakiekie-Tamaki: 34 (16), 482 (388)
Howick: 34 (64), 363 (616)
Manukau: 18 (15), 404 (464)
Manurewa-Papakura: 55 (79), 949 (951)
Franklin: 71 (68), 950 (773)

All construction for July compared to July last year, and the latest 12 months compared to the previous 12 months:
Total: $1.786 billion ($1.675 billion), up 6.6%; $19.53 billion ($18.54 billion), up 5.3%
Non-residential: $576 million ($614 million), down 6.1%; $6.2 billion ($6.3 billion), down 1.5%

Link:
1 September 2017: Housing market share moves away from standalones, but not to apartments

Attribution: Statistics NZ tables.

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Housing altimeter sticks on 30,000

Consents for new homes exceeded 30,000/year in the 12 months to October 2016, the first breach of that round figure in 11 years, and there the altimeter has stuck.

While a crisis is normally something short, what in New Zealand has widely come to be called a housing crisis has run long – since the immigration spikes of 2003-04.

Construction hasn’t keep up with migrant demand since that spike, and has fallen well short of demand from the natural increase combined with the more recent spike that began 5 years ago after a net outflow of 3191 in the June 2012 year.

Net immigration of 72,305 people in the latest 12 months would require 26,780 extra homes at the national household average of 2.7 occupants.

According to Statistics NZ’s population clock, the population ticked over 4.8 million on 20 July and has since added another 2437 people (post-census estimates). The estimate at 31 December 2015 was 680 short of 4.6 million, so in 19 months our population has risen by 203,000, or 10,700/month, or 128,300/year, requiring 47,500 extra houses (net of demolitions)/year.

Stats NZ now estimates completion rates

Experimental dwelling statistics that Statistics NZ issued today, alongside its regular monthly figures, indicate a completion rate of 86.6% of consents issued over the last 5 years, rising to 88.8% over the last 2 years.

The experimental statistics (which Statistics NZ warns are not final and shouldn’t be relied on yet for decision-making), show 123,222 homes consented since the June quarter of 2012 and 106,746 completions. For the last 2 years, the figures are 58,415 consents, 51,863 completions. On the average of 2.7 persons/household, those completions in the last year would house 140,000 people – about 12,000 more than the net population rise over those 2 years, and excluding demolitions.

But, while the population clock continues to creep up, construction has stagnated. After passing 30,000 consents/year last October, the annual figure dipped below 30,000 in December and, since then, the strongest month was May at 30,645 consents/year.

Reduce it to actual built numbers (and that’s currently an average 10 months after consent is issued, according to the experimental figures), completions would be about 27,200/year – 57% of the required 47,500.

Home number down from May, annual rate stagnating

Consents for new homes dropped from 2794 in May to 2560 in June, taking the annual figure down as well, though it remained above 30,000.

Statistics NZ read the positive in its release: 30,453 new houses, apartments, townhouses & flats consented in the year to June, up 4.7% on the 29,097 in the previous 12 months.

I’ve read it as stagnation since the 30,161 in the 12 months to October, with an upward range of under 500 on a rolling 12-monthly basis since then, and a fall from the top of that range, 30,645 in the year to May.

Statistics NZ prices, accommodation & construction senior manager Jason Attewell said in today’s release: “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/year.”

The secondary residential market in Auckland has softened in response to Reserve Bank measures constraining lending and the exit of Chinese investors who’d been prepared to pay top dollar without question, after unrestrained lending & the Chinese investment clamour pushed the market sharply upward last year and for a short revival this year.

That, in turn, should raise uncertainty in the residential construction markets, as price levelling if not sharp falls becomes more evident.

Suburban flats & townhouses jump again

One change in the overall new-build market has been in the market share of standalone housing, down from 81.1% in 2012 & 2013 to 69.25% in the latest 12 months. Apartment & retirement village consents are more volatile as they’re mostly for large developments, but the share of suburban flats & townhouses has risen strongly over the last 5 years, from 6.1% of consents nationally to 15.8%.

The national consent numbers for June and the year to June, compared to June last year, and the latest 12 months compared to the previous 12 months:

Total consents for new homes: 2560 (2752), down 7%; 30,453 (29,097), up 4.7%
Total values for new homes:  $1.05 billion ($1.08 billion), down 2.9%; $12.78 billion ($11.69 billion), up 9.3%
Standalone homes: 1691 (1863), 21,090 (20,828)
Apartments: 268 (236), 2913 (2261)
Retirement village units: 222 (289), 1651 (2206)
Suburban townhouses & flats: 379 (364), 4799 (3802)
Standalone share of consents: 66.6% (67%), 69.25% (71.6%)
Suburban townhouses & flats share of consents: 14.8% (17.7%), 15.8% (13.1%)

Auckland residential consents fall 1.6% for month

Consents for new homes in the Auckland region fell 1.6% this June compared to last June, but rose by 7.4% for the year. Consents for the month rose in 6 wards and fell in 7.

Auckland residential consents for June, compared to June last year, and the latest 12 months compared to the previous 12 months:

Region: 906 (921), 10,364 (9651)
Rodney: 105 (78), 992 (938)
Albany: 247 (211), 2585 (2270)
North Shore: 45 (70), 496 (526)
Waitakere: 45 (65), 606 (551)
Waitemata & Gulf: 61 (114), 1040 (957)
Whau: 91 (52), 378 (231)
Albert-Eden-Roskill: 160 (50), 841 (499)
Orakei: 12 (44), 248 (374)
Maungakiekie-Tamaki: 20 (24), 464 (495)
Howick: 32 (40), 393 (636)
Manukau: 23 (19), 401 (490)
Manurewa-Papakura: 19 (111), 973 (937)
Franklin: 46 (43), 947 (747)

All construction for June compared to June last year, and the latest 12 months compared to the previous 12 months:

Total: $1.536 billion ($1.847 billion), down 16.8%; $19.4 billion ($18.3 billion), up 6%
Non-residential: $451 million ($739 million), down 38.9%; $6.24 billion ($6.14 billion), up 1.6%

Earlier stories:
7 July 2017: New statistics show 97% of consents result in home
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
10 February 2017: Townhouses & flats dominate shift in home styles
19 January 2017: Building consent highs still don’t match migrant demand
7 January 2017: Intensive housing moves further ahead in suburbs
20 December 2016: Consents breach 30,000/year mark
29 July 2016: New home consents top 29,000/year

Attribution: Statistics NZ releases & tables.

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New statistics show 97% of consents result in home

Experimental figures Statistics NZ released today show 97% of new dwelling consents lead to a completed home.

Statistics NZ has been upgrading the regular statistics it provides, both within tables and through sets of information & summaries, but this piece of the puzzle was missing through a period when politicians & lobbyists were busily proclaiming trends, causes & proposed solutions anyway.

The Government organisation produces monthly building consent figures, quarterly estimates of building work undertaken, and quarterly estimates of how many homes there are in New Zealand. The missing element was just how many consents are completed, when they are completed and where in New Zealand they are.

To answer this, Statistics NZ produced some new experimental statistics. The test figures show that, while almost all building consents result in homes over time, “it can take almost a year from the time a consent is issued before the house-warming starts”.

Statistics NZ released experimental dwelling estimates yesterday on the Stats NZ innovation website. These include initial estimates of how many homes have been completed in the country’s 67 territorial authority areas and what the supply of housing is in each location.

Statistics NZ accommodation and construction indicators manager Melissa McKenzie said the estimates suggested that, at a national level:

  • About 97% of dwelling consents lead to a home being finished, though it dropped to about 93% during the 2008 global financial crisis
  • It currently takes about 10 months for a new home to be built after a dwelling consent is issued. The lag was about 6 months in 1998, and 12 months in 2008
  • About 28,000 new dwellings were completed in the year ended March 2017. Just under 31,000 dwellings were consented during the same period
  • About 1.84 million private dwellings were available in New Zealand at March 2017, comparable to the official dwelling & household estimates
  • Dwelling & household estimates to be released today provide an estimate for the June 2017 quarter using official methodology.

Ms McKenzie said: “While consents show an intention to build and are a good indicator of construction, we want to know how many are actually being built across New Zealand. At this stage, the new estimates are simply a test. Stats NZ is seeking feedback to see if people find the figures useful and how they could be improved.”

Link:
Stats NZ innovation website

Attribution: Statistics NZ release.

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Home consents resume upward trend, standalone share falls

Consents for new homes resumed their upward trend in May after a dip in April, but the rise still looks tentative against the upward lines in immigration & overall population growth.

Statistics NZ reports population growth with a calendar that rises continuously, but its monthly building consent figures appear only at the end of the following month.

The population has risen in the last 12 months from an estimated 4.69 million (97,300 total growth in the 12 months to June 2016, then another 106,000) to 4.796 million now.

At an average 2.7 residents/household, those population increases would have required housing increases of 36,000 homes built in the year to June 2016, and 39,300 built in the last 12 months (ignoring demolition or falling into disuse).

Consents for new homes fall well short of those requirements for actual construction, which means the housing “crisis” which has afflicted New Zealand is either not really a crisis, or politicians, bankers & builders don’t want to supply the solutions that would shrink the ever-widening gap.

Labour has proposed building 10,000 homes/year to start closing the gap. National has used housing accords with local councils to try to lift consent figures while at the same reducing construction conditions for those more quickly consented builds (but which have been slow to get underway) – as the country’s leaky building saga constantly warns that building standards need to rise, not fall.

For any politician to earn my vote, I would expect not just encouraging words but a plan to be laid out well before the 23 September election for fairly precise increases in home construction in various parts of the country, accompanied by financing plans which would require banking sector support for cheaper homes and government programmes to help finance cheaper homes.

And more: I would expect plans for job growth accompanying the construction of new homes – not just in new shops but a wider range of employment that would begin the task of dismantling the Auckland of one-way traffic congestion, and the New Zealand centred purely on Auckland.

Migration is an obvious issue in the housing picture. The net inflow has been boosted by the number of Kiwis returning from Australia, and that seems unlikely to be reversed in the near future as Australia’s federal government continues to stumble and job growth across the Tasman remains illusory.

The net inflow of migrants for the 12 months to May fell just short of 72,000, requiring 26,650 new homes to be built at that 2.7 residents/household average.

Building consents for new homes over those 12 months totalled 30,645, up 8% on the previous year’s 28,387, leaving 4000 consents (and mostly not yet built homes) for internal population growth of 34,000.

It’s plain that these numbers don’t stack up, which means prices will continue to rise while no political solution is evident. Added to that picture, the state of Australia’s major banks has brought warnings to tighten from international banking actors such as the International Monetary Fund, and tightening in Australia means tightening in New Zealand.

In Auckland, the one bright spot in this gloomy economic & financial morass is that the new unitary plan allows intensification over a wide spread of suburbia. Many landowners are now taking sections (or sections with an old house which most likely would be demolished) to market with consent – or ability under the plan – to build perhaps 4 units where one house previously stood.

There is a fear that this will change neighbourhoods – and it will, but not automatically badly. I write this article from a hotel room in Denver, Colorado (on a family visit, off out into the boiling sun today), and beside this pocket of city-fringe hotels there is a steady rise in both apartment living and in replacement of old homes with houses on smaller sections and with terraces & townhouses.

This city, too, believes it has a housing crisis and, like Auckland, is thinking about solutions but doing too little. It’s a city that has apartments right in the centre and many lowrise apartment blocks spread through business areas. New developments in the inner fringes are mostly lowrise – up to 6 storeys (think Britomart’s old buildings to gauge the human scale these changes are being made at). Home sizes? I’m not sure yet.

In Denver, much of the new has charm. New Zealand, and Auckland in particular, has operated on the “build to the max” mantra for decades, and charm is the first thing tossed out the window.

Building to the max (which means pricing to the max) generally rules out Auckland being a charming if over-populated city, but Auckland can develop apace, with more thought about the consequences, and become a pleasant but more populated city.

The consent picture

Standalone homes’ share of the new residential market has been falling gradually, and depending on applications for lumpy intensive construction projects for apartments, retirement villages & suburban townhouses.

In May, standalones represented 73% of the month’s consents, up from 70.6% in April but down from 77.6% in May last year. Over a year, the standalone share fell from 72.1% in the 12 months to May 2016, to 69.4% in the latest 12 months.

The national consent numbers for May and the year to May, compared to May last year, and the latest 12 months compared to the previous 12 months:

Total consents for new homes: 2794 (up 10.9% from 2520), 30,645 (up 8% from 28,387)
Total values for new homes: $1.229 billion (up 14.1% from $1.078 billion); $12.81 billion (up 12% from $11.439 billion)
Standalone homes: 2039 (up 4.2% from 1956); 21,262 (up 3.9% from 20,467)
Apartments: 123 (up 6% from 116); 2881 (up 37.5% from 2095)
Retirement village units: 137 (up 13.2% from 121); 1718 (down 17.2% from 2076)
Suburban townhouses & flats: 495 (up 51.4% from 327); 4784 (up 27.6% from 3749)
Standalone share of consents: 73% for the month (70.6%, 77.6%); 69.4% (72.1%).

Auckland residential consents up 20.9% for month

Consents for new homes in the Auckland region rose 20.9% this May compared to last May, and by 11.1% for the year. Consents for the month rose in 9 wards and fell 4 eastern & southern wards.

Auckland residential consents, month & year compared to that month last year and the previous 12 months:

Region: 885 (732), 10,379 (9434)
Rodney: 159 (76), 965 (945)
Albany: 208 (167), 2549 (2322)
North Shore: 42 (15), 521 (484)
Waitakere:  53 (44), 626 (515)
Waitemata & Gulf: 9 (20), 1093 (852)
Whau: 13 (17), 339 (195)
Albert-Eden-Roskill: 94 (37), 731 (467)
Orakei: 5 (8), 280 (356)
Maungakiekie-Tamaki: 83 (32), 468 (480)
Howick: 33 (84), 401 (658)
Manukau: 33 (30), 397 (498)
Manurewa-Papakura: 65 (106), 1065 (900)
Franklin: 88 (96), 944 (762)

Overall figures

Consents for all new residential construction, including additions & alterations at $1.9 billion, were up 12% for the year to $12.81 billion ($11.439 billion). For the month, residential consents were up 14.1% to $1.229 billion ($1.078 billion).

Across all sectors, consents for the May year were $10 billion up on the level in the May 2012 year at $19.726 billion, and up just under $2 billion (10.9%) on the total for the May 2016 year. Consents in May were up 17.4% ($520 million) to $1.871 billion.

Attribution: Statistics NZ tables.

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Statistics show both home & non-residential construction well on track

The third consecutive strong quarter lifted home construction by 23% in the year to March, returning to the 22%-plus growth path begun in 2012, which ran through to early 2015. In the year to March 2016, that growth path remained positive but dipped to 11.7%.

Non-residential construction, on the other hand, has faltered more than it’s surged ahead over the last 5 years. However, the usual first-quarter dip at the start of 2017 also followed 3 strong quarters and didn’t fall anywhere near the level in the March 2016 quarter. The value of 3 months’ work at the start of 2017 was equal to about 4 months’ work in 2012.

The total value of all construction over the March quarter, $4.935 billion, was up 10.9% on the March 2016 quarter and took building work put in place over the year to March to $20.357 billion, up 18.7% ($3.2 billion on the previous year).

In Auckland, the value of all building work in the March quarter was up 12.5% over the March 2016 quarter at $1.761 billion ($1.565 billion). Between those 2 March quarters, construction jumped by between 32-39%/quarter, lifting building work to a quarterly range of $1.83-1.985 billion.

Construction in the region crossed the $1 billion/quarter line in the September 2013 quarter.

  • This is a truncated version of my usual building work story and indicates a more positive picture than Statistics NZ’s assessment via trend & seasonally adjusted figures. I’ll try to return to it over the next couple of days. In the meantime, the Statistics NZ graph comparing consents & work completed gives a helpful perspective of construction direction through to the end of 2016.

Attribution: Statistics NZ tables & releases.

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Consents down in short month but annual figure stays above 30,000

Building consents for new homes dropped by 672 from March to 2106 in April, and dropped by 255 compared to April last year, Statistics NZ said today.

Importantly for the Government, the annual rate of consents for new homes stayed above 30,000 – 30,371 for the latest 12 months, down from 30,626 for the year to March, up from 30,162 for the year to February.

In Auckland, the 726 consents for the month were ahead of 699 in April last year but well down from the 800 in February and 942 in March, and the 10,226 for the year were up on the 10,045 to February, 10,199 to March and up 9.3% on the 9353 for the year to April 2016.

Statistics NZ noted that Easter’s occurrence in April would have reduced building consents issued for the month. In addition, when Anzac Day fell on a Tuesday it resulted in another 4-day weekend for many.

You can only use that reasoning so far, though. The value of consents for new homes nationally in March last year (including an Easter break) was $1.021 billion, falling to $948 million in the Easter-less April. The value this March was $1.199 billion, falling to $921 million.

The value of consents for all construction fell from $2.077 billion in March to $1.351 billion in April (last year, $1.505 billion down to $1.430 billion), so one April against the other the fall was 5.5%. For the April year, the value of all construction was up 10.6% to $19.45 billion ($17.589 billion in 2016).

Non-residential consents for the month were down 10.5% to $411 million ($459 million), but for the year were up 9.7% to $6.4 billion ($5.85 billion). Floor area was down 28.8% for the month to 204,000m² (286,000m²), and was down 17% for the year to 2.64 million m² (3.19 million m²).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1487 (1742), (1815), 21,179 (20,098), up 5.4% for the year
Apartments: 228 (25), 2874 (2094), up 37.2%
Retirement village units: 46 (259), 1702 (2139), down 20.4%
Townhouses, flat & units: 345 (335), 4616 (3707), up 24.5%

Around Auckland by ward, this April & last, and the April 2017 year & previous 12 months:

Region: 726 (699), 10,226 (9353)
Rodney: 81 (89), 882 (948)
Albany: 125 (135), 2508 (2316)
North Shore: 25 (17), 494 (528)
Waitakere: 25 (60), 617 (506)
Waitemata & Gulf: 166 (23), 1104 (857)
Whau: 51 (18), 343 (192)
Albert-Eden-Roskill: 25 (21), 674 (474)
Orakei: 4 (27), 283 (370)
Maungakiekie-Tamaki: 31 (26), 417 (463)
Howick: 28 (71), 452 (601)
Manukau: 32 (32), 394 (504)
Manurewa-Papakura: 73 (75), 1106 (890)
Franklin: 60 (105), 952 (704).

Attribution: Statistics NZ tables & release.

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Updated: Non-residential spurt lifts building consents over $2 million for month

Published 28 April 2017, updated 30 April 2017 with figures around Auckland region:
A sharp jump in non-residential projects in March lifted building consents over $2 billion/month for the first time.

The total for all construction was $2.077 billion ($1.505 billion in March 2016). The total for the year was $19.529 billion ($17.357 billion) – a $2.17 billion rise.

Non-residential consents jumped 82% from $460 million last March to $837 million this March. The floor area consented rose 41%, from 230,000m² to 325,000m².

These consents tend to be lumpy, making comparisons in a non-residential sector between one month & another meaningless. The big tickets in non-residential for this March were office (which includes public transport) $191 million, hotels $167 million, hospitals, nursing homes & health $104 million, shops, restaurants & bars $102 million.

Residential consents for March were up 17.4% compared to last March, and up 14.9% for the year. Consents for new homes totalled 2779 this March (2315 a year earlier), and 30,626 for the year (27,789).

Total residential consents for the month were worth $1.199 billion ($1.021 billion a year earlier), and for the year $12.865 billion ($11.038 billion for the previous 12 months).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1923 (1815), 21,434 (19,721), up 8.7% for the year
Apartments: 252 (32), 2671 (2536), up 5.3%
Retirement village units: 197 (134), 1915 (1929), down 0.7%
Townhouses, flat & units: 407 (334), 4606 (3603), up 27.8%

Around Auckland by ward, this March & last, and the March 2017 year & previous 12 months:

Region: 942 (788), 10,199 (9566)
Rodney: 122 (100), 890 (912)
Albany: 227 (178), 2518 (2332)
North Shore: 53 (75), 486 (533)
Waitakere: 55 (51), 652 (483)
Waitemata & Gulf: 116 (14), 961 (1239)
Whau: 40 (17), 310 (187)
Albert-Eden-Roskill: 37 (40), 670 (478)
Orakei: 12 (9), 306 (386)
Maungakiekie-Tamaki: 26 (22), 412 (462)
Howick: 24 (49), 495 (559)
Manukau: 38 (48), 394 (486)
Manurewa-Papakura: 114 (93), 1108 (876)
Franklin: 78 (92), 997 (633)

Attribution: Statistics NZ tables & release.

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Updated: Home consents up slightly, but revision lifts November figure to 12-year high

Published 31 March 2017, additional material 1 April 2017
Consents for new homes issued in February were up slightly – by 39 – over February last year, to 2418, raising the tally for 12 months to 30,162.

Perhaps of greater note was the revision of the November consent figure, from 2973 to 3005 new homes. I think (without time to check fully) this is the first month of 3000-plus consents since the 3447 in June 2004, which included 977 apartment consents.

That high in 2004 came 30 years after the previous high, in 1974, which was toward the end of another construction boom.

The November 2016 high theoretically came without the push from apartments, only 375 of them consented that month. But, including the 507 flats & townhouses and the 205 retirement village units (recent extra segmentation by Statistics NZ), consents for intensive construction totalled 1087.

The suburban unit/townhouse segment has fallen behind the (mostly central) apartments sector only twice in the last 18 months. That segment of the market has seen 24% growth over the last 12 months to 4533 units (3651 in the previous 12 months), whereas apartment consents have slipped 4.8% to 2451 (2574) and retirement village consents have slipped 6.2% to 1852 (974).

Standalone house consents have risen 9.1% over the 12 months to 21,326 (19,546).

Residential consents in Auckland were up slightly for the month to 800 (787) to 10,045 (9534) for the February year.

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Additional material:

Around Auckland by ward, this February & last, and the February 2017 year & previous 12 months:

Region: 800 (787), 10,045 (9275)
Rodney: 87 (80), 868 (888)
Albany: 196 (182), 2469 (2362)
North Shore: 72 (19), 508 (473)
Waitakere: 44 (44), 648 (474)
Waitemata & Gulf: 73 (179), 859 (1246)
Whau: 2 (8), 287 (179)
Albert-Eden-Roskill: 33 (20), 673 (456)
Orakei: 71 (8), 303 (485)
Maungakiekie-Tamaki: 6 (21), 408 (467)
Howick: 51 (51), 520 (602)
Manukau: 14 (51), 404 (454)
Manurewa-Papakura: 75 (67), 1087 (865)
Franklin: 76 (57), 1011 (583)

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Residential consents this February & last, and the February 2017 year & previous 12 months, in a selection of provinces:

Northland: 131 (80), 1261 (896)
Waikato: 294 (274), 3512 (3160)
Bay of Plenty: 226 (200), 2517 (2055)
Wellington: 133 (113), 2023 (1711)
Canterbury: 361 (525), 5798 (6319)

Commercial presents mixed picture

Commercial sectors present a very mixed picture. Overall, floor space is down in this month’s & year’s consents, but values are up. There’s not an even picture across sectors.

Non-residential consent floorspace for February was down 12.9% to 189,000m² (217,000m²), and for the year down 18.2% to 2,631,000m² (3,218,000m²).

Non-residential consent value for February was up 10.3% to $410 million ($372 million), and for the year up 5.3% to $6.086 million ($5.777 million).

Big changes by value for the year were hostels, boarding houses & prisons up 42.8% to $227 million; and hotels, motels & other short-term accommodation up 85.2% to $276 million.

The value of consents for all construction for the month fell 6.2% to $1.492 million ($1.59 million), and for the year it was up 10% to $18.956 billion ($17.238 billion).

Attribution: Statistics NZ tables.

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