New building consents in Wellington lag behind Auckland, Canterbury

The number of new homes consented in the Wellington region over the past year has increased by a measly one per cent.

Wellington lags behind Auckland, which is up 29 per cent, and Canterbury, up 12 per cent.

It comes as Wellington’s market remains “supercharged” with house prices typically north of a million dollars, presenting a daunting challenge to first-home buyers.

On a national scale the Statistics New Zealand figures show the number of new dwellings consented in the year ended June 2021 is at an all-time high of 44,299.

This is an increase of 18 per cent compared to the previous year.

When these figures were released recently acting Building and Construction Minister Michael Wood said it showed the residential building sector was performing well to meet demand for new houses.

“We’ve broken the record for annual number of new homes consented yet again and we’re starting to see a pattern here. This Government is committed to supporting the sector so that we can deliver more homes than ever before.”

But only 3,205 of those new dwellings were built in Wellington, compared to 19,036 in Auckland.

OneRoof editor Owen Vaughan said Wellington’s property market has been supercharged since the end of the national Covid-19 lockdown.

The capital was not experiencing the same easing of house price growth as other cities like Auckland, he said.

Vaughn said quarterly growth in Auckland was sitting at about 3.5 per cent compared to 6.2 per cent in Wellington.

Wellingtonians were facing the “daunting” price of $1 million if they wanted to buy a home compared to more like $800,000 a year ago, he said.

“The fact that there isn’t new stock coming on to the same degree as there is in other major centres, that will be cause for concern.

“But it’s pretty much why we’re seeing huge growth in centres outside of Wellington. There have been big leaps in value in areas like the Kāpiti Coast, Lower Hutt … South Wairarapa.”

But Environment Committee chairwoman councillor Iona Pannett said the numbers for Wellington City specifically were on the right trajectory.

A further breakdown of the figures in calendar years show new dwelling consents have increased from 614 in 2016 to 1,428 in 2020.

As of June 1,005 have been issued in 2021.

Pannett said Christchurch was still rebuilding after having to demolish large parts of city due to the 2011 earthquake.

Auckland has a lot more green space than Wellington, which was constrained by its topography, she said.

Pannett suspected building materials were also more expensive in the capital than the City of Sails due to the amount of steel needed for earthquake strengthening.

This city council has just signed off on its spatial plan which will loosen restrictions on development once it is incorporated into the district plan.

Pannett said Wellington might be just a few years behind Auckland’s boom.

“The spatial plan essentially escalates the level that in theory is allowed [to be developed] so I would expect to see the numbers going up.”

But she said there was a gap between what could be developed and what actually got developed which depended on the cost of materials, ground quality, and the type of housing the market wanted.

“I live with the horror of leaky buildings so I am very concerned that in trying to address this very severe housing shortage that we don’t then create more problems in 10 years’ time.”

Meanwhile, Statistics New Zealand construction statistics manager Michael Heslop said the 19,036 new homes consented in Auckland in the year ended June 2021 was a record.

This was driven by a series high of 12,237 multi-unit homes, he said.

“In Auckland, the annual number of new homes consented rose 29 per cent in the June 2021 year. This includes a 51 per cent rise in multi-unit homes, and a 2.2 per cent rise in the number of stand-alone houses consented in Auckland.”

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