Christchurch

It’s been a while since our last update of Christchurch building consents – the number of new homes being approved by the various councils in the area.

Chch consents to May 2016

Christchurch City has had a bit of an uptick in the last couple of months, whereas consent numbers in the surrounding districts (Selwyn and Waimakariri) have flattened off – for Selwyn, at least, still much higher than the historical average.

I’m surprised by the ongoing strength of the consent figures in Christchurch, not just for residential construction (i.e. homes) but also for non-residential (i.e. everything else). It seems like it might be a while longer until we get much movement of builders from the Garden City to Auckland.

Also, since a reader asked for it, here’s a comparison of the overall Canterbury region vs Auckland. This is based on the actual value of construction carried out each quarter (although it’s been seasonally adjusted to remove some of the noise).

AKL vs CANT construction

So, although Canterbury has just over a third of Auckland’s population, in early 2014 it was carrying out about the same amount of building work. This was a truly massive redeployment of resources, more than $1 billion per quarter – see how it compares to Canterbury’s pre-earthquake level of activity.

Canterbury has dipped back a little from its peak, but based on the building consent data (which is a bit of a ‘forecast’ of future activity), it’s probably going to plateau for a while longer.

Auckland, on the other hand, has had sharp increases recently – the level of activity has just about doubled in the last five years (although this includes price increases).

Lastly, before we leave Christchurch, one of the long-delayed ‘anchor projects’ for the CBD is finally starting, with the Government deciding to go it alone on the Convention Centre after the preferred developer pulled out.

Auckland

Given Auckland’s housing issues, I try to update the graph below each month. It shows the number of new homes being consented in Auckland each year.

AKL consents to May 2016

It’s a little hard to see here, but the figures in the last couple of months have been pretty disappointing. The total number of consents has dropped back a little (from 9,566 a year to 9,434). Plus, the number of apartment consents has fallen back from close to 2,000 to around 1,500. The numbers are pretty volatile – a big building could have 100-200 apartments, so the timing of those makes a big impact. We’ve now had three months when almost no new apartments were granted consent.

Detached houses, though, have been on the rise. Any new homes are better than no new homes, so that’s something, but it’s the ‘denser’ housing that needs more effort.

In happier news, downtown Auckland is still buzzing even in the cold weather, and there’s plenty going on with the start on the CRL, demolishing the old Downtown centre, Wynyard Quarter work and more.

Lastly, I’d like to give a shoutout to the new Quay St cycleway, which is a great addition to the cycling network but also a neat ride in its own right.

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31 comments

  1. Quite possible a lot of development is waiting for the new zoning rules to be settled — except in SHAs, now is not a good time to be applying for consent.

    1. Very true, but note there’s a difference between resource consent and building consent. The resource consent is issued when the development has been tested and OK’d against the various planning rules. That process is heavily dependent on what the rules are, so the Unitary Plan/ SHAs have a big impact (in particular, SHAs have to apply for resource consent by 17th September as their special status is lost after that).

      The graphs above are based on building consents, which is a much more design-intensive process and gets the building design to the point where it can be checked against the various legislative and regulatory requirements which apply across New Zealand. Once the building consent is approved, the developer can get on and start building. In fact, they need to get started within 12 months or their building consent expires. So these consents are a good measure of construction work that is going to start soon.

      By comparison, resource consents last for five years and are often obtained just to ‘future proof’ the development rights for a property.

      I’m hoping the building consent numbers will still lift a bit this year, 10,000 seems like a reasonable target for 2016, and hopefully 11,000 and 12,000 in the two years after.

      1. good point. And now I think of it I remember someone at Council saying certain resource consents are shooting up at the moment as people want to lock in various rights.

  2. Thanks John.

    I think the important point is Greater Christchurch in response to its demand shock -the loss of housing from earthquake damage has responded with a building boom that is far bigger than any previous building boom in last 25 years where we have data.

    Whereas Auckland in response to a demand shock -a huge turnaround in net migration -has not yet responded with a building boom that is larger than preceding building boom of 03 to 05.

    John your graphs clearly illustrates these points -thanks again.

  3. Deteched houses vs apartments still dominates and even higher than the last boom in 2005. Is our vision to build compact city failed?

    1. When a 600sqm piece of land goes for around $600k then people see little point in building a small $200k 120sqm house… to get maximum use out of the land they are building $600k 250sqm houses so that house makes up half the value of the overall property. The only way around that is to allow for multiple smaller dwellings (semi detached/terraced housing) or apartments. Most places aren’t zoned for this so it leaves the situation where there are plenty of larger detached houses being built but not much that would suit first home buyers.

      1. Exactly, 4 120m2 terraces on that section at $200k each means that houses can very profitably be sold for $500k

      2. When Auckland restricts land supply to half normal supply, the cost of Auckland land goes up. That means that where a section goes for $600,000 in Auckland it will go for $500,000 in Sydney, $400,000 in Melbourne, $350,000 in Brisbane. Then you can choose which section to buy for your $500,000 per unit, multi-unit development. This will give you an idea of where to invest in and which one you shouldn’t touch with a barge pole.

        Is our vision to build compact city failed?

        Yes, as long as we have a constrictive Auckland RUB the vision of a compact city is DOA.

  4. Another useful point that John’s graphs illustrate is that Selwyn’s building consent rate is plateauing at a high rate compared to Waimakariri which is dropping back to pre quake levels. The reason for this in my opinion is Selwyn is connected to Christchurch by the Southern Motorway which is near completion, which has bought Rolleston, Lincoln and Prebbleton closer to Christchurch. Whereas the Northern Motorway has not been started and the Belfast diversion is still some years off. This has caused congestion, delays and a reduction of access of Christchurch from Waimakariri.

    If commuter rail in Greater Christchurch was re-established then building consent numbers in Selwyn versus Waimakariri would probably even out.

    1. This illustrates the point that transport provision is a determinant of housing supply. As I say above, if Greater Christchurch had commuter rail then we would get a different type of house building in response. Also if the Southern and Northern motorways had dedicated bus-lanes from the get go then the satellite towns not on the commuter rail routes would also have a rapid transit service possibility.

      To see how in the past Christchurch development followed tram routes -go here.
      http://www.teara.govt.nz/en/map/10370/the-expansion-of-christchurch-to-1926

    2. I think proximity and ground stability are other important factors – in the Waimak, Kaiapoi had a large ‘red zoned’ area, and a lot of other liquefaction-prone land, such that even if all the major subdivisions there are completed, they’ll still have a population only about the same as they had pre-earthquake. And Rangiora’s too far for many people to want to commute to Christchurch.

      Selwyn, on the other hand, was mainly TC1 or equivalent land, and places like Rolleston were already growing quickly pre-quakes, with new and improving services, shops etc available there.

      Plus, most jobs which used to be in the CBD shifted either south or west, so that favoured Selwyn too.

  5. I’m on the hunt for new accommodation for the second time this year after five years in the same place. This is a great city if you have a place to live but if not it totally sucks. I want out now.

    1. Why do you think I am in hamilton?? Process in Auckland are getting stupid and it’s worth missing my friends and family to have a stable home and disposable income, well, barely anyway.

  6. Auckland has a new era of epic level sprawl. Well done us. This must have been an especially difficult process for our council, given that the entire world (apart from Auckland) has embarked on a binge of apartment/condo construction.

    Slashing land supply to the City of Auckland to increase urban construction costs and subsidising sprawl in every exurb. The Auckland Council has managed to buck the global meta-trend of urbanised construction. We are truly an exceptional city.

    1. The Auckland council and it’s predecessors have been trying get that to happen for years, unfortunately the people of Auckland and most of the new migrants (local migrants too) don’t want to live that way and that has lead us to know with everyone talking of the house prices.

      1. Nonsense Ted. The Council’s own planning regs prevent denser development, and despite this apartments and terraces sell like hot cakes when they can be built…. try to resist generalising from your own taste, we’ve had decades of that from suburbanise Councillors and it doesn’t describe the behaviour of the market at all. At best this view is backwards looking, mostly it simply reflects the nature of the regulatory environment.

        1. They have been the ones that keep a strict urban boundary in place and green lighted apartments in the CBD thinking that people would live in them.

          1. ‘apartments in the CBD thinking that people would live in them.’

            Errr? yes Ted; people do live in apartments all over the place; they are not being built just to annoy you baffled suburbanites.

            Hint, see the graph below; these are not people living in bungalows…

          2. Last time I let my CBD apartment I had 37 peopl turn up to view it on the same evening I listed the ad, like within two hours of it going on trademe. There is clearly a lot of people that want to live in city apartments.

          3. We were able to build in the CBD for decades, Len Brown did not “green light” building in the CBD – he killed it.

            Len Brown’s strict Auckland RUB has shot the price of land through the roof and we can’t build many apartments downtown for a profit, because the costs are too damned high. People want to live in Auckland, but the council has choked off land supply so it is too expensive to build there. We have very slow apartment building rates per capita.

  7. “In happier news, downtown Auckland is still buzzing even in the cold weather”

    I know this is a long shot, but is there any source for “nightlife” stats for Auckland? I’ve recently been in town a fair bit and… to be honest, compared to say 1998-2005 (showing my age a little bit) the place feels dead. K Rd doesn’t have queues, the Viaduct is quiet as. I’d be super happy if anybody has (even informal) stats about nightlife; I was thinking of using licensed premises as proxies but plenty of those aren’t “nightlife”

    1. K Rd and the Viaduct have been quiet for a while now, they were last decades hot spots. Britomart/Fort St, Wynyard and Ponsonby Rd appear to be where it is happening (according to this not so young anymore man at least!).

      There is data available from eftpos receipts by area and industry. That has been used to track hospo spend, for example the figure of a 300% increase after the shared spaces in Fort St.

      1. We did a walk along Ponsonby Road as well – it’s busy earlyish but it’s not the same as I remember town being (rose tinted glasses, queues out the door of a dozen clubs along K Rd, Viaduct being packed beyond capacity)

        Maybe kids just get to bed by 11pm nowadays! Whereas for us it was 8am…

        1. Well, the clubs won’t let people in after 2 am and have to close at 4, and kids these days have a variety of other things to do with their Friday and Saturday nights: Pokemon, Xbox, Dance Dance Revolution, Facings Book, being impertinent to their elders, &c.

          1. Is it really that bad? I remember when clubs didn’t even start getting good until 2am
            I suppose it probably makes it easier to pick up. You don’t have to wait until 5am.

    2. Yes, agree with Nick in general not-young-any-more-guessing-where-the-kids-go-these-days. But the hospo industry generally has been quieter in recent years; bars have struggled, although there’s always new bars and hotspots popping up. The relative price of having a drink out vs having one in has become much more expensive, plus drink driving laws, smoking laws etc. Those are changes for the better, but they have been hard on bars.

  8. “I’m surprised by the ongoing strength of the consent figures in Christchurch” – actually I’m not, because many people are only just now getting their protracted insurance settlements resolved. I was talking to a friend last night whose house is finally going to get rebuilt; another friend has just had their inner-city home repaired. And many central city properties are only just getting to the rebuild stage after the lawyers have finished doing their thing (or in the case of the vacant Sol Square building that went up in flames last night, insurance resolution came too late…).

    About once a month, it’s great fun to spend a day wandering around the central city; at the moment a LOT changes in that amount of time…

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