Consent growth slows

The number of new dwellings consented continues to rise, but the pace is slowing

Statistics New Zealand’s latest data shows that the number of consents issued for houses in a single month reached their highest level in more than a decade in May.

In total, 2,520 new dwellings were consented in May. That includes 1,956 houses, which is an 11-year-high.

“The trend for new standalone houses is increasing, but is flat across all dwellings,” said business indicators senior manager Neil Kelly. “Fluctuations in apartments, townhouses and other dwelling types offset steady growth in standalone houses.”

Seasonally adjusted, the number of new dwellings consented fell 0.9% compared to April. The seasonally adjusted number has fluctuated throughout the year, while the trend is now flat. For houses only, the trend increased for the fifteenth consecutive month.

While the trend and seasonally adjusted figures continue to fluctuate, the total number of new dwellings consented increased by 3,237 (13%) in the 12 months to May 2016 compared to the previous corresponding period.

In the regions

In May 2016, compared to May 2015, the number of new dwellings consented rose in ten of out of the 16 regions – the third consecutive month in which at least ten regions recorded a month-on-month increase.

The largest increases were in the Bay of Plenty (up 97 to 242; +67%), Auckland (up 81 to 732; +12%) and Canterbury (up 69 to 618; +13%). Gisborne, Hawke’s Bay, Manawatu-Wanganui, Marlborough, Nelson, Northland, Southland, Taranaki and Waikato also recorded an increase.

Marlborough (down 14 to 13; -52%), Wellington (down 12 to 138; -8%), Taranaki (down 12 to 35; -26%) and Otago (down 11 to 134; -8%) recorded the largest decreases in April 2016 compared to April 2015. Tasman was the only the other region to record a decrease, while the West Coast recorded zero change with nine new dwellings consented in both May 2016 and 2015.

Consents for all buildings total $1.6bn in May

The total value of building work consented in May 2016 was $1.6bn. This comprised just under $1.1bn of residential work, and $492m of non-residential work.

Regional focus – The inside word from Northland

While Auckland and Canterbury have driven the national construction boom over the past few years, Northland’s residential construction market is starting to ramp up on the back of steady growth.

There were 114 new dwellings consented in Northland in May, which, when considered alongside April’s 103 new dwelling consents, represents the first time in almost a decade that more than 100 new dwellings have been consented in the region in consecutive months.

Northland builder and New Zealand Certified Builders board member Mark Dobbs says that the area’s residential building market is “hooting”.

“I’ve been building around the region for 28 years and I’d say this is the best boom I’ve been involved in, although the commercial market is relatively flat,” says Mark. “The activity isn’t just based around Whangarei either; the far north is very busy as well.”

He says that Auckland’s high house prices and immigration are the two main factors driving the boom.

“Obviously we’re seeing an increase in the number of people moving up to Whangarei from Auckland to live, but there a lot of expats returning from Australia, which, combined with the high immigration we’re seeing across the country, is another big factor.

“In terms of work, new housing is the key driver, but there’s also a lot of alteration and addition work going on. It’s difficult for people to get land they want, so they’re choosing to upgrade their existing homes and stay put.”