Auckland housing consents surged in year ended October

Article – BusinessDesk

By Jenny Ruth

Nov. 30 (BusinessDesk) – Consents to build new houses jumped in the year ended October with Auckland leading the charge.

The 13,078 new homes consented in New Zealand’s biggest city were up 25 percent on the previous year and exceeded 13,000 for the first time since the early 1970s when house construction briefly hit similar levels.

Statistics New Zealand notes that Auckland’s population was less than half what it is now in the 1970s.

Auckland consents are now four times as many as at the most recent low point in the year ended August, 2009.

ASB Bank economist Jane Turner says the lift in Auckland consents coincided with a slowdown of the city’s population growth.

“(That) means that over the past year, Auckland likely built sufficient housing to keep up with new housing demand from population growth. We estimate that this is the first time this has happened since 2009,” Turner said.

However, the shortage of housing caused by under-building since 2009 means the city is still short of about 27,000 homes, she said.

“It will take a number of years of ‘over-building’ to meaningfully reduce the Auckland housing shortage.”

Only 48 percent of Auckland consents in the past year were for stand-alone houses, with the rest being for apartments, townhouses, retirement village units and flats.

Nationwide, consents were up 1.5 percent in October compared with September on a seasonally adjusted basis, reversing a 1.3 percent fall in September.

The government statistician said consents were up 6.7 percent nationally in the year ended October compared with the previous year with Auckland being the main driver followed by Wellington which showed a 25 percent increase.

Turner said the housing shortage has spread across the country in the last year and that population growth is accelerating in the regions.

“With construction sector demand high across the country, the construction sector resources remain stretched and we expect to see continued upward pressure on construction costs.”

Consents in other parts of the country actually fell in the year with the largest declines in Canterbury and the Bay of Plenty.

Westpac economist Satish Ranchhod said the Canterbury decline followed a large increase last month and the longer-term trend shows consent issuance in the region has flattened off at a fairly strong level.

“We expect that building activity in the region will ease back over time as the protracted period of post-earthquake adjustment continues,” Ranchhod said.

(BusinessDesk)

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