30 Jan 2015

Record migration pushes housing issue

5:59 pm on 30 January 2015

Analysts warn more houses are needed after a record number of migrants were attracted to New Zealand last year.

Consents for building new homes rose in March.

Consents for new homes are at the highest level since 2007. Photo: RNZ

The number of consents for new houses and apartments has hit its highest level since 2007 but more will be required, particularly in Auckland.

Official figures showed the number of dwelling consents rose by 16 percent to more than 24,500 in 2014 compared with the previous year, with Auckland and Christchurch making up 60 percent of the increase.

Separately, Statistics New Zealand said net migration cracked the 50,000 mark for the first time, with a gain of nearly 51,000 people last year.

The growing economy attracted more than 109,000 arrivals, a record high, while fewer people left.

With many of those people settling in Auckland, senior economist at ANZ Bank Mark Smith said more houses will be necessary.

"I recall back at the time of the global financial crises, the residential building activity fell to around half of historical norms, now we're getting to around historical norms so yes I think the trends are still firmly up and there's still probably a way to go given the strength we're seeing in population," he said.

International arrivals

Photo: RNZ / Todd Niall

December consents

Consents to build new houses fell more than 2.1 percent in December even as New Zealand gained a net 4,100 people.

Excluding volatile apartment numbers, consents were up 1.6 percent.

The net gain in migrants was down from the peak of 5,200 in October.

Economist at Deutsche Bank Darren Gibbs said December was disrupted by Christmas, and the consent figures were more positive than they appeared on the surface.

"We had a big increase in apartment consents in November, that came back a little bit in December, if you look at the single unit housing, that was up in December, it's running about 6 or 7 percent up on where it was this time last year so I think dwelling consent issuance is still in a positive uptrend," he said.

Mr Gibbs expected Auckland would be a key factor driving consents up further throughout the year.

He said it was too early to say that migration had peaked and would not be surprised if levels remained high through 2015.

Registered Master Builders' Association chief executive David Kelly said consents to build new houses in Auckland were still far short of what was needed.

"The consensus is that we need, or Auckland needs 10,000 new housing units per year, so there's still quite a long way to go just to catch up let alone start to fill that backlog that's built up over the last few years."

Mr Kelly said consent numbers would keep rising with the help of the Government's proposed changes to loosen planning laws.

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