Auckland and Canterbury have reached new annual records in the number of new homes consented. Photo / Bloomberg
Auckland and Canterbury have reached new annual records in the number of new homes consented. Photo / Bloomberg
Despite falling house prices and rising interest rates, the number of building consents being issued continues to rise.
There were 50,732 homes consented in the year ended September 2022, up 7 per cent from the year ended September 2021, Stats NZ said today.
”Multi-unit homes accounted for 55 per centof new homes consented in the year ended September 2022, rising from 46 per cent in the year ended September 2021″, construction and property statistics manager Michael Heslop said.
Multi-unit homes include townhouses, flats, apartments, and retirement village units.
“Dwelling consent issuance is continuing to defy gravity,” said Westpac senior economist Satish Ranchhod.
“Today’s result was stronger than we expected. We had expected overall consent issuance to pull back after the large number of retirement village units that were consented in recent months. However, consents in that segment have held firm.”
Looking into the underlying details, there was still a strong pipeline of new projects coming to market, he said.
That was mainly related to the large number of medium-density developments (like apartments and townhouses) that were being consented.
“In fact, the number of apartments and townhouses being consented was up a massive 30 per cent over the past 12 months, he said.
That had more than offset the decline in consents for stand-alone homes over the past year.
Consent issuance remained particularly strong in Auckland, where population density and housing affordability remained ongoing challenges.
“Prior to the pandemic, home building in Auckland failed to keep pace with the region’s rapid population growth, Ranchhod said.
“However, over the past few years, the region’s population has gone backwards at the same time as home building has boomed. That’s eliminated most of the underbuilding of homes that we saw last decade. Even so, the region still has far fewer homes per head of population than in other parts of the country.”
The four regions with the highest number of new homes consented in the year ended September 2022 were:
Auckland with 21,985 (up 11 per cent, compared with the year ended September 2021)
Canterbury with 8,718 (up 18 per cent)
Waikato with 4,915 (down 3.0 per cent)
Wellington with 3,819 (up 10 per cent).
Auckland and Canterbury reached new annual records in the number of new homes consented.
The record number of new homes consented in Auckland consists of 5,222 stand-alone houses (down 24 per cent compared with the year ended September 2021).
“The headwinds in the construction sector are increasingly approaching gale strength,” Ranchhod said.
Satish Ranchhod, senior economist at Westpac Bank. Photo / NZME
Interest rates were pushing higher, house prices continued to fall (especially in larger centres) and building costs continued to climb.
“Against this backdrop, we’re continuing to hear reports about buyers becoming increasingly hesitant about making purchases, while developers are cautious about bringing new projects to market. But to date, those factors don’t appear to be holding back the number of new projects being consented.”
At the same time, stretched capacity in the building sector meant that building activity had now fallen well behind consent issuance, and completion times had stretched out (especially in Auckland).
“Over time, we expect that tougher financial conditions will see consent issuance trending down,” Ranchhod said.
“But with such a large number of projects already in the pipeline, we expect the slowdown in actual construction will be gradual, with construction activity to remain firm into the new year.”
