Welcome to the April issue of Regional Property Insights for 2023, prepared by Tony Alexander with the support of First Mortgage Trust.
In this month’s Regional Property Insights for each region Tony looks at the turning of the home construction boom in NZ which got underway in 2012. The number of consents issued for new dwellings to be built fell from 27,000 heading into the recession of 2008 to the lowest level since the 1960s of 13,500 in 2011.
This decline occurred even though NZ did not go into the 2008-09 Global Financial Crisis with excess production of houses as happened in many other economies. Yet our sector was tainted with the same consumer and banking aversion and construction plummeted. This created a shortage of housing, especially in Auckland, which led to a rise in consent numbers stretching for a remarkable 11 years and reaching a record 51,000 in May last year.
Now, consent issuance is falling in response to many pressures. Bank credit is tighter to get for both builders and buyers, consumer confidence is extremely low, monetary policy has undergone a rapid tightening from excessively loose conditions, net migration flows were negative until recently, and the sector has been hit with supply chain problems, soaring materials costs and shortages of labour.
Tony also looks at how the average dwelling size is shifting through time, with the trend firmly moving towards smaller dwellings.
Report by Tony Alexander - tonyalexander.nz
This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate, the contents should not be relied upon or used as a basis for entering into any products described in this publication. The material in this report is obtained from various sources (including third parties) - neither First Mortgage Trust nor Tony Alexander warrant the accuracy, reliability or completeness of the information provided in this report, nor do they accept liability for any omissions, inaccuracies or losses incurred, either directly or indirectly, by any person arising from or in connection with the supply, use or misuse of the whole or any part of this report. Any and all third party data or analysis in this report does not necessarily represent the views of First Mortgage Trust or Tony Alexander. To the extent that any information or recommendations in this publication constitute financial advice, they do not take into account any person’s particular financial situation or goals. We strongly recommend readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication. No person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.
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