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%
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.