New-build reality check

Building consents don't always translate into more homes finds CoreLogic. Photo / 123RF

As our population increases, building enough houses is an ongoing challenge. One common measure of that building pace is the number of building consents issued. I have a better way.

In our database, I can count the total number of houses, flats and apartments at any point in time for any region, city, town or suburb.

By comparing over time I can see exactly how the total number of residential dwellings has changed.

This increase in the housing stock is the true measure of how fast we are building. The results are fascinating.

In the year to the end of March 2017 there were just under 10,000 consents issued for new residential dwellings in Auckland.

While that is not enough to satisfy the increase in population, it is a significant step up from previous years.

However, using my method the housing stock in Auckland increased by just a shade under 6000 over the same period.

There is a big difference between 10,000 and 6000.

So why the difference between the number of building consents and the actual increase in the housing stock? There are three reasons.

• It takes time for houses to be built after the building consent has been issued. If we go back a couple of years the number of consents was just under 7000, closer to last year's increase in stock. But this time lag doesn't explain the whole gap.

• A second reason is that some of those consents will not get built, but that drop-out rate is only around 5 per cent so isn't a big part of the explanation.

• A third reason is stock replacement. Not all building consents are for new houses on vacant sections.

In many cases the consent is to replace an existing dwelling with either one or several new ones.

For example there may two consents for new townhouses, but an old house on the section has to be demolished first to make room for them.

In that case we count two consents but the housing stock only increases by one.

This means we are far further behind building enough dwellings to match population growth than many are assuming based on consent numbers.

This true change in housing stock is something we are keeping a close eye on, so watch out for more on this in the coming months.