To most Aucklanders, 2018 looks a lot like 2017. House prices have been flat, or have gone down a tiny bit, depending on what data you look at. Rents keep going up. Auckland is still growing, still congested, and still has sub-par public transport (but it’s improving).
Auckland has more construction underway than ever before.
Cranes are up across the city, and site fencing and signage can be seen in every neighbourhood. The flip side is that builders have struggled to complete such a large number of projects. We've been following this for years in the RCG Development Tracker, and almost every project in Auckland is running behind its original schedule.
That said, there certainly are a whole heap of projects. The future pipeline looks very strong too, including huge government housing projects in their early stages – Tamaki, Northcote, Papakura, Mangere, Mt Roskill and more.
Just a few years ago, Auckland construction was in the doldrums with the GFC and Canterbury earthquakes pulling resources away. The recovery started in 2013, and construction has grown to record levels – creating new homes, hotels, offices, warehouses, and shopping centres.
As we predicted, 50% of dwellings consented in Auckland in 2017 were ‘attached’ typologies, the first time this had ever been achieved. In 2018, the trend has continued and consents have reached record levels - 12,959 dwellings in the last year, with 53% of them 'attached'. We expect those numbers to stabilise or drop back, though, with builders a long way off being able to deliver 13,000 homes a year.
Almost all consents eventually turn into homes, but it does take time. Consents have topped 10,000 a year for the last three years running, but only 8,000 homes were finished in 2017. We think 10,000 new homes will be completed and ready to occupy in 2018 – the highest total for more than a decade, but still not keeping pace with population growth.
Despite builders being very busy, there are still some great projects starting.
The University of Auckland is underway with new halls of residence and engineering and medical buildings; AUT is investing too; there are a spate of new hotels; and there are still some apartments hitting their pre-sales targets and shifting into construction mode. On the retail front, there are major expansions underway at Westfield Newmarket and Sylvia Park (not to mention Commercial Bay, with H&M already open), and smaller expansions around the city.
It takes time to build a better city, but our industry is doing some great work. There are some excellent projects being completed in 2018, with 2019 looking even better. Aucklanders are starting to see more housing options; hotels are feeding the tourism industry; vibrant new retail precincts are coming together in Parnell, the city centre and elsewhere; and new offices and warehouses are giving space for companies to grow.
What about the rest of New Zealand? Things are looking strong across most of the country, although the Canterbury rebuild continues to wind down. More on that another time!
Local Media highlights from the past week...
This week’s sharemarket tumble has been an opportunity to get some of the financial industry’s favourite dramatic words – ‘bloodbath’, ‘plunge’, ‘tumble’, ‘plummet’ – back into the headlines: But what does this mean for investors? Co-founder of Sharesies Leighton Roberts explains.
For anyone following share markets or browsing the headlines, you may have heard that there’s been uncharacteristically strong growth in share prices during the last few months following a small hiccup in February.
Brace yourselves, because the country could be entering a fairly confusing period.
It could be that we will be watching inflation rising very sharply - and yet the Reserve Bank will continue to contemplate the possibility of cuts to official interest rates.
The future of Kiwi space exploration is being worked on in the most unlikely of places - a factory next to a second-hand car dealer, near New Zealand's biggest mall.
But inside Rocket Lab's gleaming new plant, things suddenly take a very Star Trek turn - and not just because of the presence of opening-day guest William Shatner. Three of the company's Electron launch vehicles (or "rockets", as most people call them) are under construction on the factory floor. Sub-assembly cells feature 3D metal printers. A giant CNC (computer numerical control) unit that can mill components the size of a bus will be operational within weeks.
The likes of Xero's Small Business Insights data continue to throw doubt on claims the economy is in trouble.
That does not mean growth across the economy has not slowed up. It has, and businesses are nervous. Global gyrations do not help.