New-build consents at record level
New homes are still being consented at levels not seen before but high costs, falling property prices and low net migration put a question mark over how many houses will continue to be built.
A record high 51,015 new dwellings got consent in the year ended May, up 17% or nearly 10,000 homes on a year earlier, Stats NZ said.
The annual record of 40,025 new homes consented stood from February 1974 until March 2021, construction and property statistics manager Michael Heslop said.
‘‘Since March 2021, we have continued to see record-breaking levels of new homes being consented, driven by the growth in multi-unit homes.’’
In the year to May, 26,479 multiunit homes were consented, up 36% on a year earlier, with 24,536 standalone houses consented, up 2.1%.
‘‘This is the third consecutive month that the annual number of new multi-unit homes consented exceeded new standalone houses,’’ Heslop said.
Multi-unit homes include townhouses, apartments, retirement village units, and flats.
Canterbury was the region with the highest increase in new homes consented over the year, up 34% to 8529, followed by Otago (up 30% to 2540), Southland (up 27% to 482), and Wellington (up 21% to 3899).
Auckland saw a 17% increase, or 21,688 homes consented, and Waikato had a 12% rise, or 5149 homes.
However, the number of consents issued fell for the month. The seasonally adjusted number of new homes consented in May was 4146, down 0.5% compared with April, which in turn was down 8.6% on March.
Compared with May 2021, monthly seasonally adjusted consents were up 2.9%.
The monthly number of new homes consented could fluctuate due to large apartment and townhouse projects, Heslop said.
Westpac senior economist Satish Ranchhod said consent issuance had already flattened off, having been close to current levels for about a year once monthly swings were smoothed out. A peak in the construction cycle was fast approaching, if not already here, he said.
‘‘With a large number of projects already in the works, we still expect building activity will remain strong for some time. But with biting capacity constraints and growing financial pressures, the scope for further increases is limited.
‘‘And over time, as economic activity more generally cools and existing housing shortages are eroded, we expect to see home building activity easing off its recent highs.’’
Population growth had outpaced home building over much of the past decade, and many regions saw a housing shortage. Now that was reversing, with net migration plummeting and likely to remain low for some time.
‘‘The combination of a downturn in population growth at the same time as home building has charged higher means that the shortages that developed in recent years are now being rapidly eroded.
‘‘Even allowing for a gradual lift in migration over the coming years, consent issuance is now running well ahead of what’s needed to keep up with population changes.’’