New Zealand building consents up as Auckland supply shortage continues

Photo:   Craigsydnz

Building consents continue to climb in New Zealand, according to official figures, but is it enough to meet demand?

More homes were consented in the first six months of 2015 than a year previously, according to Statistics New Zealand said today. 12,057 new dwellings were consented between January and June 2015, worth almost $4 billion.

In the month of June 2015, 2,042 new dwellings were consented nationally, up 2.0 percent on June 2014. The total value of consents for all buildings in June 2015 was $1.3 billion, comprising $832 million for residential buildings and $454 million for non-residential buildings.

“The new building consent figures show the total floor area for the dwellings consented was 221 hectares,” business indicators manager Clara Eatherley said. “This means that enough new homes were consented in the first half of 2015 to cover an area twice the size of Wellington Airport.”

While the comparison sounds impressive, though, in seasonally adjusted terms, the number is down 4.1 per cent from May 2015.

The figures follow construction of homes in the country hitting a seven-year high in November 2014, but even with growth in building activity, New Zealand continues to face a shortage of supply – particularly in Auckland.

“New dwelling consents growth this month was led by Auckland, which offset the fall in Canterbury,” Ms Eatherley said, but the market remains heated.

Indeed, Auckland-based agent Barfoot & Thompson sold 1,597 homes in March 2015, the highest number they have ever recorded in a calendar month, while the shortfall in supply meant that prices jumped 3.9 per cent month-on-month in March to $776,729, a record high,

Housing Minister Nick Smith told the NZ Herald that construction is accelerating as fast as possible – but data from Auckland Council’s Housing Project Office (HPO) estimates that the city’s shortfall could rocket up to 25,000 dwellings in 2018 from current levels of roughly 15,000.

“What we know is right now there is a shortage and we need to pull out all stops to grow supply as quickly as we can,” he commented.