There was little to cheer about in the latest dwelling consent figures released by Statistics NZ.
They showed that 2834 new homes were consented in August, barely changed from the 2811 that were consented in July and up only slightly from the 2752 consented in June. August’s numbers were up 14% compared with August last year.
However that’s well short of the sort of increase in numbers that is going to be required to make any sort of a dent in the Auckland housing shortage.
And although the number of new homes being consented is largely flat, their value is increasing rapidly, with the total value of consents issued up 13.2% in the month.
That means the average value of dwelling consents issued was $357,445 in August, up $39,053 (13.2%) compared to July.
Those figures suggest that not only are too few homes being built to supply demand, but their cost is also rising rapidly.
In Auckland where the housing crisis is most severe the figures are even more dire, with 1970 new dwellings consented in August, down from 1087 in July but up from the 741 consented in August last year.
However while the number of new dwelling consented in Auckland was down compared to July, the total value of new consents rose strongly, from $357 million to $380 million.
Over the last 12 months the average value of new dwelling consents issued in Auckland has increased by $58,410 (17.5%), from $333,333 in August last year to $391,752 in August this year.
And those figures exclude the cost of land and other costs that determine the eventual selling price of a home.
That suggests that not only are not enough new homes being built in Auckland, but the price of those that are being built is rising strongly and affordability will be worsening.
That helped propel the annual value of consents issued for new homes past $10 billion for the first time in the 12 months to August.
“Consent values are the highest they’ve ever been, however in terms of the numbers, we’re still not building quite as many homes as we did around 2004 and are still well short of the building boom in the mid-1970s,” Statistics NZ business indicators senior manager Neil Kelly said.
On top of the $1.013 billion worth of new dwellings that were consented in the year to August, another $167 million of structural alteration work was consented for existing dwellings, taking the total value of residential building work consented to $1.181 billion for the year.
However while the value of residential building work is up, the value of commercial building work is heading in the opposite direction.
The value of non-residential building consents declined for the second month in a row to $534 million in August, down from $739 million in June and well below the $671 million of non-residential work consented in August last year.
In a First Impressions newsletter on the consent figures, Westpac economist David Norman said the appeals lodged against Auckland’s new Unitary Plan would be likely to slow down the consenting process in Auckland.
“The administrative burden associated with a resource consent has increased significantly for both developers and council staff as a result of the appeals,” he said.
“These obstacles mean we are unlikely to to see a sudden uptick in resource consents, and consequently in building consents issued that it was hoped the Unitary Plan could deliver in short order.”