Spring is usually a busy time in the residential property market. I’ve always thought that the best time to check out a house is winter, so you can get an idea of whether it stays warm or not, but what do I know?

This spring has also been a very busy time for launches of new residential projects – i.e. they’ve started going on sale, whether or not they’re actually being built yet. Since September, 13 apartment/ terrace projects have launched by my count, with 810 homes between them, and there’s still half of November to go.

Launched in spring 2015:
West Edge (stage 1)
Daisy apartments
Juliette Lofts
Wyndham Residences
The Maritime Apartments
The Antipodean
Connect Anzac Apartments
St Marks
Stonefields – Verto Apartments
Whitaker Park Central
Stonefields – Bellus Apartments
Merchant Quarter MQ2

It’s a pretty big ‘pipeline’ of potential new apartments, most of which will be completed in 2017, assuming they sell well. You can take a look at these, and another 500+ projects around the country, over on our RCG Development Tracker page. It’s quite amazing how much is going on around the CBD and the fringe suburbs like Ponsonby, Grey Lynn and Eden Terrace.

There’s not much to report this month in terms of building consents. Some news articles said that consents for Auckland had dropped, which they had relative to the previous month – but not the same month of the previous year. So, like the are-house-prices-going-up-or-down stories this month, it depends on how you want to look at the data.*

Building consents are a good ‘leading indicator’ of how many homes are going to get built in the next year, because when the consent has been approved, the builder is free to get on with building them, and the consent lapses if work isn’t started within a year.

Auckland Dwelling Consents to Sep 2015

The graph above looks at consents on a “moving annual” basis, so it’s showing how many homes are consented in each 12-month period – in this case, the latest data is for October 2014 to September 2015. There’s only been a small rise vs last month, driven by detached homes (4,966 consented in the last year). However, I think we’ll see apartment consents heading upwards in the next few months.

* Similar issue there – REINZ were looking at Oct 2015 vs Sep 2015, QV were looking at Oct 2015 vs Oct 2014

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  1. that graph is good for reading the total and seeing the trend for the blue (houses) but is hard to view the trend for the other 3 categories. Could you plot another graph where those categories are drawn as 3 separate lines?

      1. So this apartment boom has some way to go to match the last one, and that will be more difficult as we aren’t designing or building them as badly as we did then; all happily consented by a Council with terrible standards, one, in fact, that clearly had no regard for the urban built environment [in contradistinction to the suburban realm which it did care for]. Another reason to be pleased for the dissolution of the old councils.

        Additionally I hope we don’t have such a steep ramp up followed by a symmetrical plunge again either; also less likely for the same reason.

        1. Its got to ramp to at least 14K a year and stay there for 30 years a vertiable tidal wave.

          And thats what you need – a tidal wave of dwellings for a tidal wave of people.

        2. Yes, it would be good to get total consents to 14,000 homes a year and keep it there. We’ll need a lot of apartments for that. The council has made moves towards getting a pipeline in place for greenfields land – 7 years’ supply zoned and ready to build at all times is the target – and that’s great, but why don’t we have something similar for apartments? That would probably mean zoning changes so they could be built in more places…

  2. That section around around the bottom of Anzac ave and Beach Road is going to be very busy with the Connect Anzac Apartments, The Maritime Apartments and The Antipodean going in.

    On a side note, does anyone know if there are any plans for a building at 539 MT Eden Road, next to the Crystal Palace? That spot has been empty for years, if not decades. It seems like the perfect spot for an apartment block with shops on the street front. https://www.google.co.nz/maps/place/539+Mount+Eden+Rd,+Mt+Eden,+Auckland+1024/@-36.885752,174.7609184,129m/data=!3m1!1e3!4m2!3m1!1s0x6d0d463247c4aaeb:0xd1863f676cccc394!6m1!1e1?dg=dbrw&newdg=1

    1. Beach Rd/ Anzac will definitely be very busy – and the site on the corner between them just sold recently as well, so there will probably be more apartments to come around there.

  3. Sooo, despite 24 years between the start of the graph and the end of the graph and 2+ years of SHAs being in existence and tens of thousands of “sections” being released to market by those SHA’s the rate of consenting for houses is barely above the trough way back in 92-93. And we’re not even matching the previous peak for housing consents in 02-03. Both times when Aucklands population was much lower than it is now or and the populatiopn projections of where it projected to grow to were a lot lower too. So the long term latent demand wasn’t there.

    I’ve said it before, and I’ll say it again, if proof was ever needed that SHAs are not working for getting houses and other dwellings built (- or even consented FFS!) – then this is it.

    And collectively we’re nowhere near the 13,000+ new dwellings needed each and every year from now on and for the next 30 years to (a) manage the population growth of Auckland and (b) make a dent in the historic under-building that went over the last 10+ years.

    Abject market failure, clear for all to see.

    1. I agree except for the point about it being a market failure – I believe its more of a regulatory failure than a market failure.

      1. Really?

        This Government and its partners like ACT believe the market is supposed to provide in all cases, and that “regulation” is only needed in specific cases where the market is not working or where societal goals need to be put ahead of the economics.

        So to say its a regulatory failure problem, means that the market has failed and isn’t working – if it was, there’d be no reason to regulate.

        1. The market is currently providing history’s largest ever price incentive to build homes in Auckland, with guaranteed massive profits. How this is a market failure?

          The market is doing everything it can, but there are barriers in place that cannot be overcome.

        2. And what would those be Angus?

          We’re told time and again by Nick Smith that there are tens of thousands of right now, ready and waiting i.e. “buildable” sections – waiting for houses, so where are they all?

          Thats right, the invisible hand, is providing invisible houses.

          But perhaps those making massive profits you allude to can’t because (a) the houses cost a lot of money to build so the profits are slimmer and more importably (b) they now cost so much that people can’t afford them or won’t buy them when they also have to live out in the margins of the city and commute for an hour or more each way each day in order to own one.

          And they’d rather have a place (apartment) closer to town and the good schools and such but they can’t buy them in the numbers needed, because, the market is you know, busy building houses on the fringes.

          Yep sounds like a real market success story to me. Can’t blame council for that situation.

        3. And what would those be Angus?

          A minimum number of parking spaces, light shaft requirements, historic preservation of older suburbs and so on

        4. Its not that it costs too much to build houses, its that the land under the houses is worth too much (due to land use regulations, etc) that they now cost so much that people can’t afford them.
          And if it does cost too much to build houses in NZ compared to other countries, that is most likely the result of regulations too – building code, building material tariffs, rules on floor height / number of windows / etc, untold inspections, resource consents, only specialised tradies being able to sign off work – the list of regulations goes on and on and on.
          In a free market you could take any piece of land and build whatever you want on it to whatever size or quality you saw the biggest demand for. Until that happens you can’t blame the market.

        5. ” its that the land under the houses is worth too much”

          its the same problem in EVERY city in the world, Jimbo, land proximate to any central city is worth a lot more because your transport costs are lower. So do you blame that situation on “land regulations”.

          London is just as, if not more, unaffordable for the average income there as it is in Auckland for the average income here, you never hear that fact mentioned in the news or here on TB. But its a fact, and a big concern for them too. But they aren’t rushing to abolish land regulations to deal with it.
          So why should we? Its an uninformed knee-jerk reaction to do so in an unfettered way.

          In any case in NZ, Last year Bod Dey published a report from a developer that broke out exactly where all the money went on a $18m development in Avondale, at most 1/3rd of the cost was taken up with land purchase, development contributions, making it ready for building. The rest (2/3rds) was taken up by building costs, materials, margins for all the subbies and contractors, the building material companies and the banks doing the finance and of course the profit margins for the developer and real estate companies marketing the complex. Go look it up – makes for a sobering look at the levels of waste and inefficiencies of the building industry. And most of that is NOT regulation caused, its self-imposed by the industry players on themselves.

          “In a free market you could take any piece of land and build whatever you want on it to whatever size or quality you saw the biggest demand for.”

          You could, but who pays for the infrastructure that that building requires, like, I don’t know: water, wastewater, electricity, a roading network, communications network, and public transport networks that all service the area and interface with the rest of the systems?

          Under the current model, the council and other organisations (like Chorus, Vector etc) does all that, out of overall income (e.g. rates). So we all pay – in effect, subsidizing this model.
          It would be better if those who directly benefit (developers and residents) pay for it directly, which is why Nick Smith has announced that councils will be able to levy special targeted rates on such developments in future – paid for by the residents for 30 or so years.
          Makes sense. The rest of the world does it, and if anything its more (of the right sort) of regulation – but isn’t regulation of any sort what you are opposed to?

          Or is it only bad regulations you dislike, and who decides which is which?

          One mans bad set of regulations is another mans good set of regulations.

        6. I’m not talking about a lack of regulation, I’m talking about an excess of regulation! Remove the regulation and the market just might work.

  4. I have the theory that the bellwether for the New Zealand economy is when someone builds a tower block in Takapuna. Each one seems to signal a major recession and someone ends up losing their shirt.

  5. Does anyone know what’s happening with the old “The Warehouse” site in Balmoral. I recall there were plans to redevelop it with new shops and apartments but when I went past yesterday it looks abandoned, have the NIMBYS killed it?

    1. It’s still owned by The Warehouse, and I’m sure they’ll develop it when the time is right for them. They went through a resource consent and plan change process, which was approved in February. So the timing now is up to them.

  6. We had less than a million people living in Auckland in 1991 and there are 1.45 million here now, it would be useful to normalise for population.

    1. yes good point. Although maybe it would be better to normalise by the annual change in population? After all the size of your base population seems to matter less to new dwelling construction than population growth.

  7. I want to go back to the blog about the “Is Auckland Out of Control: not according to the Computer”.
    How can I do that? It’s because the information on it should be more widely shared and no News outlet seems to have picked up on it I think it should be shared among the readers here and not forgotten by the next election.

    1. Here ya go

      You find previous posts by searching or by using the monthly summary of posts on the left hand side under the Archives banner, this post was made about October as I recall, so if you click October 2015, you can see the posts from them in descending order in October, and at the bottom of the list is a link to older posts as it doesn’t show all October posts, so you can find it that way by walking back through the archives.
      If you don’t about when it was, search is your best friend – Google can find these posts easily, so thats usually easier than the search on the site.

      Its how I found this one for you by walking the archives.

      Protip: When searching don’t search for the entire post name, just a string with the key words in like in this case “is Auckland out of control”. Doing it that way finds the TB post as the first result in Google.

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