Westpac economists say the squeeze and shortage of housing in Auckland is going to get worse
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Home consent numbers previously released by the Statistics New Zealand, point to some softening in building activity over the coming months, according to Westpac economists.
In their weekly commentary, the economists said that consent issuance in Auckland has fallen 8% over the past three months, despite a pullback in the volatile multiples consent category, according to a report from interest.co.nz
“Looking at the longer-term trend, annual dwelling consent numbers have essentially flat lined at just over 10,000 since the start of this year,” the economists said. “Importantly, dwelling consents numbers have plateaued at levels that are still well short of what's needed to keep up with population growth.”
“Consequently, it’s likely that tightness in the Auckland housing market will get worse before it gets better.”
According to the economists, growing shortage of houses meant building levels were likely to rise only gradually - this would challenge the strength of economic growth over the coming year, interest.co.nz said.
The Reserve Bank is not likely to start raising the OCR from the current 1.75% till late 2019, Westpac economists said. “This has seen housing market tightness in Auckland rising to acute levels, reflected in a sharp increase in the average number of people per dwelling,” they said.
Auckland’s population is set to continue growing at a rapid pace, with 290,000 more people expected to settle in the region over the coming decade – signalling the need for a significant number of new homes in the region, the economists said.
Related stories:
National home value growth slips below 5%
Auckland housing value deflates
In their weekly commentary, the economists said that consent issuance in Auckland has fallen 8% over the past three months, despite a pullback in the volatile multiples consent category, according to a report from interest.co.nz
“Looking at the longer-term trend, annual dwelling consent numbers have essentially flat lined at just over 10,000 since the start of this year,” the economists said. “Importantly, dwelling consents numbers have plateaued at levels that are still well short of what's needed to keep up with population growth.”
“Consequently, it’s likely that tightness in the Auckland housing market will get worse before it gets better.”
According to the economists, growing shortage of houses meant building levels were likely to rise only gradually - this would challenge the strength of economic growth over the coming year, interest.co.nz said.
The Reserve Bank is not likely to start raising the OCR from the current 1.75% till late 2019, Westpac economists said. “This has seen housing market tightness in Auckland rising to acute levels, reflected in a sharp increase in the average number of people per dwelling,” they said.
Auckland’s population is set to continue growing at a rapid pace, with 290,000 more people expected to settle in the region over the coming decade – signalling the need for a significant number of new homes in the region, the economists said.
Related stories:
National home value growth slips below 5%
Auckland housing value deflates
