Building consents dropped yet again and we have a market now that is close to a Zombie State. This may be bad for builders who now must rely on re-cladding and refurbishments to make ends meet. But it’s great news for investors as the looming shortage that must follow comes closer. Virtually no new houses keeps property prices stronger, and pushes up rents. Our cantankerous banking system doesn’t help either as lenders blow hot and cold from week to week.
Published 5 June 2011
Bob Dey Report
Building consents for new homes fell 34% in April from a year earlier, and by 160 consents from March to 927. Excluding the more volatile apartment sector, consents were down 32% from April last year to 893.
Statistics NZ put a modestly bright slant on things, saying its seasonally adjusted count rose 3.3% in March then 3.8% in April. Countering that, Statistics NZ’s trend series including & excluding apartments were down a third in a year to the lowest level since the series including apartments was started in 1982.
Consents for new homes fell by 476 from November to 994 in December last year and have stayed down – 867 in January (comparatively high for the month that’s normally quietest of the year), 973 in February, a lift to 1087 in March (but that’s normally one of the big months of that year and the level this March was down 28% from the 1501 a year earlier) and 927 in April.
The annual consent level fell 10.4% to 14,138 (15,772 the previous year). That included 971 apartment consents, down 12.3% for the year. There were 34 apartment consents in April, which beat the 13 in February 2010 but was still the fifth-quietest month in 2 years.
April was also a quiet month for alteration & addition consents at $65 million (only January 2011, at $64 million, was lower in the past 2 years). The value of all residential consents for April was $354 million, down $66 million from March and 26% – $126 million – below the level a year earlier.
The annual decline has been lighter in percentage terms – 6.6% for the April year to $5.174 billion, but that’s a decline of $366 million without taking rising inflation into account. Residential consents were at $7.7 billion in 2008, so the latest year is down by $2.53 billion – 33%, again without taking inflation into account.
Around the regions:
Auckland consents fell from 306 in April 2010 to 259, Northland from 66 to 34, Waikato from 169 to 104, Bay of Plenty from 79 to 63, Hawke’s Bay from 80 to 23, Wellington from 112 to 68, Canterbury from 266 to 198, Otago from 92 to 36. Gisborne was steady on 9 and Tasman rose from 12 to 16.
Around Auckland (using old council boundaries but chopping Franklin in half):
Rodney was down by one to 46, North Shore fell from 50 to 36, Waitakere was down by 3 to 43, Auckland consents were halved from 93 to 48, Manukau rose from 34 to 64, Papakura fell from 16 to 13 and Franklin was down from 29 to 9.
Non-residential building consents for the April year were down 4.4% by floor area to 2.165 million m² and down 12% by value to $3.6 billion – 21% & $1 billion lower than the $4.6 billion in 2008. Non-building construction for the year was down 14.9% to $417 million.
For the month, the $34 million of consents was $2 million above March and $2 million below April 2010.
Total authorisations for the month, at $640 million, were down 24% ($197 million) from a year earlier and $156 million down from March. Total consents for the year were down 9.2% to $9.2 billion – a $936 million fall. From the peak of $12.64 billion into early 2008, the fall is 27% ($3.4 billion).