The current headwinds facing the construction industry do not seem to be dampening the optimism of property developers, with $2.62 billion in new construction approved in July, up 4.1% compared to July last year. last year and 27.5% more compared to July 2020, according to Statistics NEW ZEALAND.
That brought the total value of authorized new construction work to $31.571 billion for the 12 months through July this year, up 16.9% compared to the previous 12 months.
That included 4,100 new homes approved in July plus another $213 million in residential renovations, bringing the total value of residential construction work approved in July to $1.928 million, up 6.9% from July of last year.
In the 12 months to July, residential works were accessed for $22,585 million, 18.0% more than in the previous 12 months.
On top of that, another $691 million in non-residential construction was approved in July, down 2.9% from July of last year, but that brought the value of non-residential construction approved in the 12 months through July to $8,986 million, which was 14.1 more. % compared to the previous 12 months.
While those numbers suggest a substantial pipeline of work is being created for the construction industry for at least the next two years, there are also signs of pressure in some segments of the market.
The most notable of these is in the construction of detached houses.
The number of detached homes being built has been declining for some time as developers and buyers increasingly turn to more affordable multi-unit housing such as terrace homes and residential units.
In July, only 1,730 detached homes were approved nationwide, down 25.3% from July last year, while 1,853 townhouses and residential units were approved, up 47.8% from July last year .
One of the challenges facing independent homebuilders today is that retirement-minded baby boomers are a significant part of this market, and are likely to see the value of their existing homes decline while homebuilders and developers new homes that want to on face rising costs, reducing development margins and pricing options.
On the commercial property front, there was a very sharp drop in the number of new storage buildings as licensed warehouses last month, with the value of licensed work for that type of building down 21.9% compared to July last month. last year.
However, monthly numbers for commercial building permits can be very volatile, so it’s too early to tell if this is just a monthly aberration or the start of a longer-term trend.
A more detailed quarterly analysis of regional building permits, including average construction cost and cost per square meter, is available on our Residential Building Consent Analysis Page and ours Commercial buildings consent analysis page.
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