Canterbury drags down building numbers

House construction plays catch-up. File Photo.

There‘s been a national decrease in the number of new homes being built, according to new data from Statistics NZ.

The rate of new homes building tailed off towards the end of last year, but the figure is still ahead of the total for 2015.

In seasonally adjusted terms, the number of new homes consented fell seven percent in December 2016, mainly due to a drop in apartment consents.

The trend for consented homes fell 12 percent in the last five months of 2016, mainly driven by Canterbury.

The total number of homes consented in the year was 29,970 – up 10 per cent from 2015, and the most for a calendar year since 2004.

'Residential consents continued to decline in Canterbury last year, but there was strong growth in most other regions, especially Auckland and nearby regions,” says business indicators senior manager Neil Kelly.

The focus on Canterbury's decline obscures the fact the housing growth in the Bay of Plenty is more than in any other region.

In 2016, the regions that consented the most new homes were:

  • Auckland – 9930 (up seven percent from 2015)
  • Canterbury – 5903 (down nine per cent)
  • Waikato – 3552 (up 18 per cent)
  • Bay of Plenty – 2520 (up 33 per cent).

Including alterations, the value of building work consented in the December 2016 month was $1.6 billion, comprising $989 million of residential work and $595 million of non-residential work.

Consents for houses, retirement village units, and townhouses all increased in 2016, while the number of apartments consented decreased. Houses were by far the most popular type of home consented.

To date, the Kaikoura earthquake of November 14 has not had an obvious effect on building consent statistics.

In commenting on the statistics, Building and Construction Industry Training Organisation chief executive Warwick Quinn says the industry needs to readdress the way it looks at skills training, if it's to meet future demand.

To the year ending December 2016, 29,970 new homes gained building consents. This is the highest number since 2004 but still well below the high of 1973 when about 40,000 new homes were consented.

Warwick expects the upward trend to continue in 2017.

He says this rate of construction is at New Zealand's long-running normal rate of 6.5 builds per 1000 people and a response to the record low rate of construction during the global financial crisis.

In 2011 the build rate fell as low as 3.1 builds per 1000. The number of homes that weren't built during the GFC is double the number that weren't built during all other recessions combined and New Zealand is still playing catch-up, says Warwick.

He says New Zealand built about 45,000 fewer homes over the past 10 years compared to the previous ten, yet the population grew by about 480,000.

'It is no surprise to anyone that Auckland is the worst affected with about 4-5 years of backlog based on historical build rates. Other regions have significant backlogs as well including Bay of Plenty (3.7years), Northland (2.7years) and Tasman/Marlborough (2.5 years),” says Warwick.

While BCITO has a record 10,000 apprentices in training more are needed to meet building demand.

'While 10,000 apprentices is a new milestone for us it is also our new normal and must be increased if we are to successfully fill the skills gap in construction.

'We tend to get a surge in apprentice numbers each year from about March and it will be interesting to see if that continues in 2017.

'Most of our growth comes from those firms that traditionally have apprentices, but in order to get the increase in apprentice numbers that we need, we also need to increase the number of employers who train. In order to do that we need to ensure training programmes align more closely with their business and meet employees expectations.”

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