New dwelling consents are now at the highest level since 1975, but economists say that it’s likely they have reached their peak. A total of 33,576 new dwellings were consented nationwide in the year ending January 2019, according to the latest data from Stats NZ.
The record was in February 1974 when 40,025 of dwellings were consented nationwide.
“However, the population was only around 3 million in the 1970s, compared with nearly 5 million today,” says Melissa McKenzie, the construction statistics manager.
“That means that while approximately 13 new homes were consented per 1,000 New Zealanders at the 1970s peak, around 7 per 1,000 were consented in the year ended January 2019. “
The growth in new dwelling consents was driven by an increase in large multi-unit projects such as apartments, especially in Auckland.
In Auckland alone, 13,272 new homes were consented in the year ended January 2019.
Keep in mind that only about 70% of consented dwellings increase the net housing stock the same year because you have to demolish the old buildings.
Therefore, we increased the net NZ housing stock by about 23,500 dwellings (instead of 33,576 consented) while Auckland increased by only around 9,500 dwellings (instead of 13,272 consented).
That seems like a big number anyway. Are we out of the woods yet? Are we building enough?
Auckland’s housing shortfall is at least 46,000 dwellings as a result of exceptional population growth and few new dwellings being built in the wake of the Global Financial Crisis.
Only in late 2018 did annual new dwelling consents begin to balance with population growth, and it has yet to eat into the shortfall, says Auckland Council Chief Economist David Norman.
Constructions companies are not performing well, to say the least. Think of Mainzeal, Arrow International, Alexandra Park Village developer the Auckland Trotters Club etc.
ASB senior economist Jane Turner says Auckland’s housing shortage has spread beyond Auckland and is now resulting in tight housing markets in many of the regions.
The average household size in New Zealand is 2.7 people per household (3 people in Auckland), according to Stats NZ.
NZ enjoyed extra 43,000 migrants in the last year, and nearly half of them (21,500) would live in Auckland.
Therefore, we have to double the number of consents and achieve 13 new homes to be consented per 1,000 New Zealanders as at the 1970s peak.
How do we do it? That’s a 5 million dollar question!
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