Consent spike from flats, village units
APARTMENTS and retirement village units in Auckland have driven a spike in new home consents for the year to August, as the total number of new dwellings has reached a 13year high.
However, economists are questioning whether this is merely a spike or sustainable trend.
While overall volumes and values were up across the country, from $1.1 billion to $1.17 billion, South Island and Otago consents were relatively flat.
Around the country, 30,736 new homes were consented in the year to August, compared with previous peaks of 33,251 in the year to June 2004 and 40,025 in the year to February 1974.
South Island consents declined from 858 a year ago to 818 while values were flat, from $308 million to $310 million; not unlike Otago data, where consent numbers gained only slightly, from 192 to 202, and values were up from $78 million to $84 million.
Westpac’s chief economist Dominick Stephens said the result was ‘‘much stronger than expected’’, with consents up 10% in August.
However, he said the increase was driven by consents for multiples of apartments and townhouses, which had their single biggest month in 13 years.
ASB senior economist Jane Turner said residential consent issuance had effectively flatlined during the past few months.
‘‘Residential construction is still running short of what is needed to meet current population growth, let alone alleviate dwelling shortages in Auckland and Wellington,’’ Mrs Turner said.
She said credit conditions and a slowing housing market were likely constraining house building demand.
‘‘While this month’s building
PHOTO: GETTY IMAGES
consents are encouraging, we remain unsure if trend growth in residential building demand will lift much further from current levels,’’ she said.
She noted both Auckland and Wellington required more housing stock to catch up with strong population growth in recent years.
However, while we would typically expect to see further growth in building demand in response, a number of factors might be crimping demand growth,’’ she said.
‘‘That included high construction costs, construction sector capacity constraints, rising mortgage rates, tightening lending standards, election uncertainty and the weaker housing market,’’ Mrs Turner said.
SNZ’s construction statistics manager Melissa McKenzie said Auckland’s building consent statistics were ‘‘quite volatile’’, given the high proportion of apartments.
‘‘Looking at the longerterm picture, Auckland has consented an average of more than 850 new homes a month over the past year,’’ she said in a statement.
There were 10,265 new homes consented in Auckland region in the year to August 2017.
‘‘This compares with a peak of 12,937 new homes consented in the June 2004 year; the highest number since the series began in 1991,’’ she said.
Spike or trend? An August spike in building consents is mainly down to work in Auckland. The South returned largely flat data.