RMBA says 2013 ended on a high

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The latest residential building consent figures released recently confirmed the growth that occurred in November 2013 carried on in December 2013.

The 2013 year ended with 21,300 new homes and apartments consented, up 26% on 2012 levels.

Statistics New Zealand figures showed 2035 new home and apartment consents were issued for December 2013, the second highest month in 2013 behind November (2267).

This was bolstered by continued strong growth in Canterbury where 581 consents were issued and Auckland with 704 consents.

RMBA chief executive Warwick Quinn says that the overall result is certainly a positive one, and shows the rebuild in Canterbury is underway and the response to the housing shortages in Auckland are starting to gain momentum.

Mr Quinn says the national growth continues to be driven by Canterbury and Auckland with 57% of all new home activity.

“The sector has continued to expand throughout 2013 with the greatest growth in Auckland (up 38%) and Canterbury (up 43%),” Mr Quinn says. “The last quarter of 2013 saw construction activity pick up markedly in Christchurch City which has been lagging behind the other regions in Canterbury.”

Mr Quinn says it is interesting to analyse construction costs. He says the average construction cost is $304,000 nationally, with most areas within 5% of that amount — eg Auckland $311,000, Canterbury $313,000 and Wellington $289,000.

He says this is quite understandable given labour rates and material costs are relatively on par across the country. However, the market value of the properties can vary considerably based on location and land cost, and the market value of existing homes.

Mr Quinn says he expects continued growth in 2014 and for the Reserve Bank to up the official cash rate which will have a detrimental impact on construction.

But it will be interesting to see whether the pent up demand in Auckland is strong enough to withstand mortgage increases through 2014.

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