The latest building consent figures indicate the highest number of new homes and apartments consents in five years.
Statistics New Zealand figures show 1755 new homes and apartment consents were issued for April 2013, a 43% increase on April 2012.
The trend for the number of new houses and apartments has increased for 25 consecutive months from March 2011 when an historic low was reached, with the level now 61% higher.
RMBF chief executive Warwick Quinn says the overall result is certainly a positive one, “but we need to look below the national statistics to really understand what is going on”.
Mr Quinn says the growth is being driven by Canterbury and Auckland, and when one takes out 185 apartments in Otago and Wellington in April, the Canterbury and Auckland share of overall activity continues to grow (now more than 50%) while the rest of the country is quite flat.
“While we like to see the consent figures rise, we have to be careful not to get carried away with the increase without appreciating the vagaries within it,” Mr Quinn says.
“We have been predicting for a couple of years now ‘the tale of two cities’, with Auckland and Canterbury dominating the new home construction market activity while wider New Zealand struggles.”
Mr Quinn agrees that the regions are certainly better than they have been, but it is still very tough there and work is hard to come by. He believes if activity doesn’t pick up then migration for tradespeople to Canterbury and Auckland is likely.
He says the housing pressures in Auckland and Canterbury have been driving up property values for a while now. These are the only regions in New Zealand that have continuous rising prices — which generates greater levels of building activity to meet a shortfall in supply.
The rest of New Zealand has some property price increases, but the levels are similar to what they were in 2008.
Mr Quinn says while the increased level of work is welcomed, overall building activity is still quite low and coming off record low levels.
“New Zealand should be building in the order of 20,000 to 25,000 new homes per annum to maintain its housing stock and population growth, and we have been well below those levels for the past five years,” he says.
“While we will see more new residential consents issued again in 2013, it is not on the back of a strong economy but in response to housing problems in our two biggest cities.
“There is some spare capacity, but as the growth is not consistent, a redistribution of that capacity will be needed to address this trend,” he says.