Auckland residential building consents jump 28% as housing demand stays strong
By Rebecca Howard
Aug. 30 (BusinessDesk) - Auckland continues to lead the way in construction demand, with residential building consents jumping 28 percent in the year to the end of July outpacing an 8 percent nationwide gain.
Across the country, 32,850 permits for new residential dwellings were issued in the year to July 31 versus 30,404 in the prior year. Consents issued for townhouses, flats and units were up 26 percent to 5,945 while consents for apartments climbed 37 percent to 3,902 and retirement village units gained 24.percent to 1,996. Permits for new houses, however, fell 1 percent on the year to 21,007.
According to Statistics New Zealand, there were 12,485 new homes consented in Auckland in the 12 months to July, up 28 percent on the year. That's still tracking behind the 13,000 permits needed to keep up with population growth.
Of those Auckland consents, stand-alone houses accounted for about half at 6,039. However, an all-time record 3,032 townhouses, flats, and units got consent in the year ended July.
Stronger population growth in Auckland is expected to keep supporting construction activity. Wellington also posted a 22 percent rise in the number of consents issued, although Canterbury reported an 8.7 percent decline.
"Housing construction demand has remained reasonably strong in Auckland and Wellington, underpinned by undersupplied housing stock following a number of years of strong population growth," said ASB Bank senior economist Jane Turner in a note. "However, in some other NZ regions it appears that house building activity has peaked." She expects some regional divergence to continue over the next year.
For the July month, residential building consents fell 10 percent to 2,522 while seasonally adjusted permits for stand-alone houses were down 6 percent to 1,670, Stats NZ said.
“The number of new homes consented can be quite volatile on a monthly basis, particularly as the number of apartments consented tends to fluctuate a lot,” construction indicators manager Melissa McKenzie said.
The value of all residential building consents issued in the year ended July, including alterations and additions, was $14.2 billion, up 10 percent from $12.9 billion a year earlier.
In the year ended July 2018, non-residential building consents totalled $6.8 billion, up 10 percent from the July 2017 year. Of that $1.2 billion was for education buildings.
Turner said, however, "we do see non-residential construction activity as vulnerable to weak business confidence. Given the fall in business building investment intentions, we continue to expect commercial construction activity to slow over the second half of 2018."