Consent spike from flats, vil­lage units

Otago Daily Times - - Business & Money - SIMON HART­LEY

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.

simon.hart­ley@odt.co.nz

Spike or trend? An Au­gust spike in build­ing con­sents is mainly down to work in Auck­land. The South re­turned largely flat data.

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