As NZ population booms, dwelling supply is falling

By Leith van Onselen

The New Zealand National Government’s single-minded focus on solving Auckland’s housing crisis by boosting supply continues to take a hammering.

Yesterday, Statistics New Zealand released figures showing that construction momentum has slowed, with trend number of new homes consented decreasing 15% in the five months to January 2017:

ScreenHunter_17804 Mar. 06 15.11
ScreenHunter_17803 Mar. 06 15.08

“Most regions appear to have contributed to the recent decrease in residential consents, although Canterbury is the most significant contributor, followed by Auckland,” business indicators senior manager Neil Kelly said.

According to the figures, there were 30,123 new dwellings consented across New Zealand in the year to January 2017, with just 10,032 consented in Auckland.

Clearly, this level of construction is nowhere near high enough to keep up with New Zealand’s immigration-led population growth, which added just under 100,000 people in the 2016 calendar year, with Auckland the primary recipient:

ScreenHunter_17805 Mar. 06 15.18

Accordingly, Auckland’s housing crisis continues to worsen, as noted by Interest.co.nz:

There is little good news in the latest figures, especially for people in Auckland being squeezed by the region’s growing housing shortage.

It is estimated that 15,000 new homes need to be built in Auckland every year just to keep pace with its migration-fuelled population growth.

That’s an average of 1250 new homes a month, and the 512 that were consented in January was just 41% of what is required, meaning Auckland’s housing shortage worsened by around 738 homes during the month.

Thus, the National Government remains under acute pressure for failing to fix the housing mess as it heads to the General Election on 23 September.

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Comments

  1. Building consents drop cause for concern …Twyford … Labour | Scoop News

    http://www.scoop.co.nz/stories/PA1703/S00076/building-consents-drop-cause-for-concern.htm

    Building consents drop cause for concern

    The dream of home ownership is being further undermined by the National Government’s failure to boost construction, as shown by the slowdown in building consents, says Labour’s Housing spokesperson Phil Twyford.

    “Despite Nick Smith’s statements that there is a ‘record building boom’, the latest building consents data from Statistics New Zealand shows a slowdown in building around the country, not just in Christchurch.

    “Even when the statistics are adjusted for seasonal changes, the number of dwellings consented in January was down five per cent on where it was in January last year. The number of consents is down 15 per cent from August.

    “The data also shows the current level of consents in Auckland is not enough to keep up with the city’s rapidly growing population. … read more via hypwerlink above …

  2. Tauranga to ‘review’ problems with building consents – Bay of Plenty Times – Bay of Plenty Times News

    http://www.nzherald.co.nz/bay-of-plenty-times/news/article.cfm?c_id=1503343&objectid=11813336

    Tauranga City Council has brought in experts to investigate problems with its building consents.

    The move comes amid public complaints about the way the council is handling consents.

    Details about the nature of the complaints were not available today, but the council has been under pressure since a citywide building boom sparked record numbers of applications to build new homes and alter existing ones.

    A council spokesman said an independent review would be conducted by auditing and advisory firm BDO. … read more via hyperlink above

  3. I had a few things to say to Christchurch Newstalk ZB radio host Chris Lynch back mid-February on some … just some … aspects of New Zealand’s lousy construction performance … listen up …

    Hugh Pavletich ‘Bill English is wrong on housing and he knows it’

    http://www.newstalkzb.co.nz/on-air/christchurch/canterbury-mornings/audio/hugh-pavletich-bill-english-is-wrong-on-housing-and-he-knows-it/

    About the same time, I touched on other aspects of the issue in the front part of this Sunday Star Times / Fairfax article by Rob Stock …

    How to make housing affordable? Political parties draw battlelines | Stuff.co.nz

    http://i.stuff.co.nz/business/money/89189951/political-parties-draw-battlelines-on-housing-affordability

    With all due respects Leith, to suggest the Government ‘has a single minded focus on Auckland’ is wrong. Instead it has a grossly muddled approach to everything with no political leadership.

    PM Bill English should have fired Building & Construction Minister Nick Smith mid-December. Smith will lose the election for them 23 September 2017.

    At the time of this year’s Demographia Housing Affordability Survey release 23 January, I touched on these leadership failings within … ‘New Zealand’s housing consensus: Where is the political leadership ?’ …

    http://pc.blogspot.co.nz/2017/01/auckland-worlds-fourth-hardest-to-buy.html

  4. This is a classic case of NIMBY. Wellington based politicians and bureaucrats love immigration as is spruiks growth and confuses the public – GDP/capita is barely growing – boosts tax revenue, but all the externalities including much of the cost, falls on Auckland. If Labour manages to produce a coherent argument this government is stuffed and Good riddance !

    • Big if for Labour being able to string ‘a coherent argument ‘ together. They haven’t strung much together for quite some time.

  5. RBNZ review of bank capital requirements to cover definition of capital, the measurement of risks banks face, plus minimum capital requirements and buffers | interest.co.nz

    https://www.interest.co.nz/business/86372/rbnz-review-bank-capital-requirements-cover-definition-capital-measurement-risks

    Reserve Bank Deputy Governor and Head of Financial Stability Grant Spencer says the prudential regulator will release an issues paper detailing a review of bank capital requirements next month. … read more via hyperlink above …

    Hardly surprising … mid-January NZ Herald report …

    New Zealand residential property hits $1 trillion mark – Business – NZ Herald News

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11781028

    As Leith illustrated recently with a cracker graph of the Anglo countries, New Zealand’s Total Housing Stock Value v GDP is the WORST at about 3.9. Normal markets it’s about 1.2 … screaming tops 1.5 times.

  6. In terms of size, New Zealand reminds me of the Celtic tiger, Ireland and all the hogshit stories why its housing was through the roof F O R E V E R and ever and ever.
    The rest is history, ah???

  7. kiwikarynMEMBER

    I can hear the screech of brakes being slammed on new builds in Christchurch – the game is up. The city is in oversupply, investors are dumping their investment properties on the market at a great rate of knots. Now its just a question of who gets out the door before midnight, and who gets left holding the pumpkin.

  8. … Moody’s Report …

    Housing affordability in Auckland remains poor MOODY’S | Scoop News

    http://www.scoop.co.nz/stories/AK1703/S00213/housing-affordability-in-auckland-remains-poor.htm

    Moody’s: Housing affordability in Auckland remains poor, despite improvement

    Sydney, March 07, 2017 — Moody’s Investors Service says that the poor state of housing affordability in Auckland — despite a recent improvement driven by rising incomes and low interest rates — is credit negative for New Zealand covered bonds.

    “Rising household incomes and record low interest rates have prevented a deterioration in housing affordability in New Zealand over the past year, including in Auckland, the country’s largest city,” says Karen Burkhardt, a Moody’s Associate Analyst.

    “However, high housing prices in Auckland — which accounts for a large proportion of mortgage loans in New Zealand cover pools — mean that new home owners in the city are spending on average close to half of their monthly income on mortgage repayments, making it considerably less affordable than any other region in the country,” adds Burkhardt.

    Moody’s conclusions were contained in a just-released report on New Zealand covered bonds, “Auckland Housing Affordability Remains Poor Despite Improvement”. … read more via hyperlink above …

    Where are buyers winning price battle? | Susan Edmunds| Stuff.co.nz

    http://i.stuff.co.nz/business/90167661/where-are-buyers-winning-price-battle