Auckland Housing Accord First Quarterly Report for the ... · Auckland Housing Accord Targets . The...

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Based on data to 31 December 2016 for:

City-wide building consents and completions (Auckland Council and Statistics New Zealand (SNZ))

City-wide new residential sections (Land Information New Zealand (LINZ))

Special housing area consenting activity (Development Programme Office, Auckland Council)

Special Housing area establishment and plan variations (Development Programme Office, Auckland Council)

Residential sales (Real Estate Institute of New Zealand (REINZ))

Auckland Housing Accord First Quarterly Report for the Fourth Accord Year

1 October 2016 to 31 December 2016

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Summary • This report differs slightly in structure and information from previous Auckland Housing Accord monitoring reports. This change reflects the shift

in focus from the Accord targets (valid to 30 September 2016) and Special Housing Areas to broader housing and related infrastructure data. The Auckland Housing Accord was extended to 22 May 2017 at the agreement of the Mayor of Auckland and the Minister of Building and Construction.

• Auckland Council have adopted a new, more accurate data reporting system since the previous monitoring report was published. This has resulted in updates to some previously reported figures and contributed to a delay in publishing this report.

• City-wide results to 31 December 2016 show:

o More new dwellings (10,026) issued with building consents in the 12 months to 31 December 2016 than in any 12 month period to 31 December since 2004 (when it was 12,115). This represents an 8% increase on the previous year (up by 775 from 9,251 consented dwellings)

o 4,366 dwellings in multi-unit buildings were issued with building consents in the 12 months to 31 December 2016 , up by 300 from 4,066 in the previous year

o In the first quarter of Accord Year 4, 1,433 dwellings in multi-unit buildings accounted for 53% of all new dwellings consented (2,720), which is higher than the all three previous years (42% in Accord Year 3; 43% in Accord Year 2; and 38% in Accord Year 1).

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Auckland Housing Accord • 154 special housing areas were created over the first 3 years of the Auckland Housing Accord in 10 separate tranches with an estimated dwelling

capacity of over 60,000 dwellings once fully developed.

• The Auckland Housing Accord total 3-Year section and dwelling target was 96% achieved with a surplus in Year 1 offsetting a shortfall in Years 2 and 3. 37,708 net dwellings and sections were consented against a target of 39,000. However, year on year the number of sections and dwellings created has increased.

• At the start of the Accord, the target was challenging with monthly dwellings consented averaging just 470 per month. The monthly average new dwellings consented in the first quarter of Year 4 has risen to 907.

• The special housing areas have been well used by developers with 56 of them under development. Almost 4,000 sections have been created and over 4,300 dwellings have been consented in special housing areas.

• Only 12 special housing areas have been disestablished with no activity occurring. These account for only 2% (1,364 dwellings / sections) of the overall expected yield of the special housing areas.

• The Auckland Housing Accord has seen a further 29,000 dwellings enabled by the live zoning of 2,200 hectares of land in Special Housing Areas in the Future Urban Zone, creating a strong forward land supply position.

• At 31 December 2016, the supply of “ready to go” greenfield land was 9 years, which is 2 years above the Auckland Plan target.

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Auckland Housing Accord Targets The Auckland Housing Accord targets are based on the net number of new dwellings issued with building consents and sections created in Auckland each year.

The Auckland Housing Accord was extended to 22 May 2017. No targets have been agreed for Accord Year 4.

The net number of new sections created and dwellings issued with building consents in Accord Year 1 (11,074) exceeded the target of 9,000 and in Accord Year 2 (12,704 dwellings / sections created) was 97.7% of the target of 13,000. In Accord Year 3, the net number of new sections created and dwellings consented (13,930) was 82% of the year’s target of 17,000.

In the first quarter of Year 4 the net number of new sections created and dwellings consented is 4,807, which is 55% higher of the quarterly average for the first three years of the Accord (assuming even distribution in each quarter). This illustrates a gradual acceleration of consent activity over the life of the Accord.

The number of new dwellings issued with building consents in the first quarter of Accord Year 4 (2,720) and the number of new sections created (2,706) must each be adjusted for the 619 occasions on which they overlap.

After adjustment there were net 4,807 dwellings issued with building consents and sections created.

Net number of new dwellings with building consents and sections created Auckland Housing Accord: 31 October 2013 – 31 December 2016; adjusted for dwelling /section combinations

Net number of new dwellings consented and sections created Auckland, 1 October – 31 December 2016; adjusted for dwelling/section combinations; Statistics NZ (dwellings); Land Information NZ (sections)

Overlap

*The data in this graph differs from that shown in monitoring report #12 (1 July 2016 to 30 September 2016). The Accord Year 3 figures have been updated from 13,760 to 13,938.

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Cumulative long term dwelling supply forecast: increasing impact of SHAs More than 123,000 new greenfield and brownfield dwellings and sections are known to be in the development pipeline to 2030 delivering an average of 8,800 dwellings per annum. Almost 50 per cent of these dwellings will be delivered within SHAs (expected total yield of over 60,000).

Forecast dwelling supply from

SHAs

All known forecast supply other

than SHAs

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Note: Section creation does not necessarily reflect the increasing pace of development across Auckland shown by other indicators. Section creation data is limited to land with a ‘residential’ zone in the Proposed Auckland Unitary Plan. Dwellings are also being built on non-residential sections, most commonly apartments or other higher-density residential developments on business zoned land and to a lesser extent, dwellings constructed in rural zones. The section creation data may also reflect the general surge in brownfield development activity, which can see multiple residential titles created on single sections or and the use of ‘superlots’ in greenfield developments as an interim measure where large lots are created now for later subdivision or multi-unit development.

Total new residential sections – monthly

A total of 2,706 new residential sections, under 5000m2, were created in the first quarter of Year 4 of the Accord, to add to the 16,814 created over the first 3 years of the Accord - an average of 5,604 per annum or 467 per month. The average monthly number of new residential sections created increased from 428 per month in the year prior to the Accord, to 460 per month in Accord Year 1. It rose to 470 sections per month in Accord Year 2 and then remained at 471 per month in Accord Year 3 due to low numbers in January and September 2016. However, the monthly average for the 2016 calendar year is higher, sitting at 562. The highest number of residential sections created in any month since the Accord began (1,021) was recorded in December 2016. Year on year the number of sections created is increasing since the Accord began.

Accord Year 1 5,523 sections




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Total new dwellings issued with building consents – monthly In Accord Year 2, 1 October 2014 – 30 September 2015, 8,721 new dwellings were issued with building consents, up from 7,403 in the Accord Year 1. In Year 3, over 10,000 new dwellings were issued with building consents, an average of 835 dwellings per month. In the first quarter of Year 4 total of 2,720 new dwellings were consented. The quarter average of 907 is the highest since the Accord began and November 2016 was the best month since the start of the Accord with 1,188 new dwellings consented. Year on year the number of new dwellings receiving building consent has increased since the Accord began.

Number of new dwellings that received building consent Auckland; 1 October 2012 – 31 December 2016; monthly total; Statistics New Zealand (Infoshare)

*The data in this graph differs from that shown in monitoring report #12 (1 July 2016 to 30 September 2016). September 2016 figures have been updated from 752 to 816.

Accord Year 1 7,403 dwellings




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Total new dwellings consented – long term trends The first quarter of Accord Year 4 recorded the highest average new dwellings consented in a quarter (907 per month) since the Accord began. This quarter included the highest number of consented new dwellings in a month (1,188 in November 2016). In total 10,026 new dwellings were consented in the year to 31 December 2016 which was the highest twelve-month total since May 2005, over a decade ago (10,126).

Number of new dwellings that received building consent Auckland: 1 January 2000 – 31 December 2016; monthly total; Statistics New Zealand (Infoshare)


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Total new dwellings consented in multi-unit buildings – monthly

The number of dwellings consented within multi-unit buildings has continued to increase, highlighting the importance of multi-unit buildings to the Auckland housing market. We anticipate that this importance will continue as the capacity for intensification provided in the Auckland Unitary Plan is utilised. November 2016 had 745 consented dwellings in multi-unit buildings, the highest monthly figure recorded in the Accord history. The multi-unit sector accounts for 53% of all consented dwellings (2,720) in the first quarter of Accord Year 4.

Housing Accord Year

Consented dwellings in multi-unit buildings

Percentage of all consented dwellings

Year 1 2,842 38.4%

Year 2 3,755 43.1%

Year 3 4,214 42.0%In the f irst quarter of Year 4 1,433 52.7%

Total 12,244 42.4%


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Total new multi-unit dwellings – long term trends The total number of dwellings in multi-unit buildings issued with building consents for the year to 31 December 2016 (4,366) was the highest 12 month total since May 2005 (4,682), over a decade ago. The monthly average multi-unit dwellings consented has risen from 237 in Accord Year 1 to 478 in the first quarter of Accord Year 4.

Number of new dwellings in multi-unit buildings that received building consent Auckland; 1 January 2000 – 31 December 2016; monthly total; Statistics New Zealand (Infoshare)


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Total new dwellings issued with building consents - monthly moving average

The monthly average number of all new dwellings issued with building consents over the 12 months to 31 December 2016 (836 per month) is higher than in any 12-month period since 31 May 2005 (844 per month). The 12-monthly average for dwellings in multi-unit buildings to 31 December 2016 (364) was the highest average in the Accord period.

Moving monthly average new dwellings that received building consent in the last 12 months Auckland; 1 June 1991 – 31 December 2016; Statistics New Zealand (Infoshare)

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Number of new dwellings that received building consent in the previous 12 months Auckland: 1 January 1992 – 31 December 2016; Statistics New Zealand (Infoshare)

Yearly new dwellings issued with building consents More new dwellings (10,026) were issued with building consents in the 12 months to 31 December 2016 than in any 12 month period to 31 December since 2004 (12,115). The 2004 figure is inflated by 5,995 multi-unit dwellings, small in floor area (averaging 90m2) and mostly located in central Auckland. In the year to 31 December 2016, the 4,366 multi-unit dwellings, although less than the number in 2004 was over two times the number to 31 December 2013 (1,992), and their average floor area was 27% larger than in 2004 at an average 124m2. The detached dwelling component of the 2016 data (5,660 dwellings) is already 92% of that in 2004 (6,120 dwellings). The combined floor area of all residential types in the year to December 2016 (1.86 million m2) was almost the same as that to December 2004 (1.87 million m2).

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Dwelling sales prices

The Auckland median monthly house price at 31 December 2016 showed a softening trend by decreasing in the short term to $840,000 from a high of $868,000 at 31 October 2016. In the longer term the median monthly house price has increased from $770,000 at 31 December 2015.

Over the longer term, dwelling prices in Auckland continue to trend upwards, with the average median price for the 12 months to 31 December 2016 increasing to $815,037 from $734,021 in the previous year to 31 December 2015. Monthly median and 12-month moving average dwelling price

Auckland; 31 January 2002 – 31 December 2016; Real Estate Institute of New Zealand

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Residential building activity (new plus altered) annual value in $ billions Auckland, 1 January 1992 to 31 December 2016; Statistics New Zealand (Infoshare)

Total value of residential building activity in Auckland The value of residential building activity in Auckland was $4.8bn in the year to 31 December 2016, which is 116% weighted average increase from 2012 total value. The growth in the value of building activity in 2016 to 2012 is due not only to the 119% increase in consented dwellings, but also increases in building cost and type of construction, as well as the building of larger houses.

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Special housing areas – expected supply The 154 special housing areas are expected to eventually supply 62,377* dwellings or sections over 15-20 years. The total yield figure is reduced to 61,013 when removing the yield that was anticipated from the 12 SHAs that have been disestablished with no activity occurring (only a 2 per cent reduction).

The chart shows that by the end of calendar year 2016, a total of 5,040 sections and dwellings were expected to have been created in the special housing areas.

However, by 31 December 2016 there were 7,214 new dwellings consented and sections created in the special housing areas, trending way above supply expectations.

* Auckland Council Dashboard to 31 December 2016 - Actual SHA yields may vary as plan variations and qualifying developments are progressed.

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Section creation in special housing areas In Accord Year 1 to 30 September 2014, 638 new residential section titles under 5000m2 were created in special housing areas. In Accord Year 2 a further 605 sections were created and additional 1,713 in Accord Year 3, bringing total sections created in SHAs since the start of the Accord to 2,956. Section creation in special housing areas has increased in Accord Year 3 to an average 143 per month, up from 50 per month in Year 2.

This is 18% of all residential sections created (16,814) in Auckland in the first 3 years of the Accord. The 1,713 new sections created in special housing areas in Accord Year 3 represents 30% of all 5,654 sections created in the year, with special housing areas playing an increasing role in development activity.

In the first quarter of Accord Year 4, the new residential section titles under 5000m2 created in special housing areas were 1,015, making a total of almost 4,000 sections for the Accord period to end of December 2016.

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Section creation in special housing areas Sections creation can now be seen in 30 SHAs including the Scott Point Hobsonville SHA (564), Flat Bush (434), Takanini (305), Weymouth (304), Whenuapai Village (237), Northern Tamaki (205) and Hingaia (198), with highest section creation in Silverdale (570).

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Dwelling consents in special housing areas In Accord Year 1 to 30 September 2014, 429 new residential dwellings were consented in special housing areas, 5.7% of all dwellings consented in Auckland. In Accord Year 2, a further 797 dwellings were consented in SHAs (9.1% of all dwellings consented) bringing total dwellings to 1,226.

Accord Year 3 resulted in a further 1,400 new dwellings consented in SHAs (14.1% of all dwellings consented). This is more than double the combined numbers in Years 1 and 2, and brings total dwellings to 2,626. SHAs continue to provide a rising share of all of Auckland’s consenting. Development is accelerating strongly in the SHAs in the first quarter of Year 4 of the Accord, adding 1,732 consents (19% of all dwellings consented) to bring the total dwellings consented in SHAs 4,358.

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Dwellings consented in special housing areas Most new dwellings consented continue to be seen in recognised development areas like Hobsonville (Sunderland and parts of Buckley), Flat Bush Strategic, Hingaia, Silverdale and Hobsonville Point. Development is also progressing strongly in places like Northern Tamaki, Takanini, Weymouth and Otahuhu Coast.

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Dwelling completions in special housing areas

27 SHAs have now registered completed* homes and overall 1684** homes have been completed in SHAs since the Accord began. More completions are anticipated as more SHAs progress through the development cycle. Completions are progressing strongly in those SHAs that were gazetted in the early tranches, such as Flat Bush, Scott Point, Hingaia and Weymouth. This reflects the time needed to progress from preparations to consent approval to earthworks and finally to building and completing homes.

* Completed are defined as dwellings that have received a final building inspection and / or obtained a Code of Compliance Certificate. Completions numbers may understate the number of dwellings inhabited as residents may occupy a dwelling prior to final inspection. Although this may not be lawful, it can occur in practice.

** The inconsistency in data between this and the previous monitoring report is due to the change in data reporting system used by Auckland Council.

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Activity in special housing areas At 31 December 2016 there were strong levels of activity occurring the 154 SHAs:

• 39 SHAs were having homes being built in them • 17 SHAs had earthworks and site preparations underway • Another 72 SHAs have consents lodged or approved • 7 have a pre-application underway • 7 SHAs were still in preparation by the developers, the majority of which were declared in Tranche 10 in May 2016. The SHAs in this tranche

have until 19 May 2017 to lodge resource consent before being disestablished • 12 SHAs were disestablished without any consenting activity occurring. These account for only 2% (1,364 dwellings / sections) of the overall

expected yield of the special housing areas.

Special Housing Area Performance (Number of SHAs) Auckland, 31 December 2016

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• 128 SHAs have lodged consents and are progressing through the stages of development.

• Only 26 SHAs have not lodged consents. 9 of these SHAs remain active and could still have qualifying development resource consent applications lodged under the HASHAA legislation until they are dis-established on 15 February 2017 (tranche 9) or 19 May 2017 (tranche 10). A further 7 SHAs have a pre-application underway.

• Only 12 of these special housing areas had not been used by the developer. These account for only 1,364 dwellings / sections, only 2% of overall expected SHA yield.

SHA status at 31 March 2017

Status Number of SHAs

Estimated yield Area (ha)

Progressing (consents lodged)

128 60,139 4,827

No current progress (Consents not yet lodged)

26 2,238 44

Total 154 62,377 4,871

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Greenfield land supply

• The Future Urban Zone (FUZ) in the Auckland Unitary Plan provides over 30 years of greenfield land supply to 2047. It identifies approximately 15,000 hectares of rural land for future urbanisation with the potential to accommodate approximately 135,000 dwellings.

• The Housing Accord has accelerated the supply of greenfield land by allowing FUZ land to be declared as special housing areas.

• 2,235 hectares of the FUZ has been live-zoned by plan variation in 17 special housing areas, capable of accommodating about 29,000 new dwellings.

• By 31 December 2016, the Housing Accord plan variations had already contributed 7 years of supply to that outlook, and once completed will contribute a total of 9 years of greenfield land supply.

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Housing accord contribution to greenfield land supply • At the start of the Accord on 1 October 2013 there were an estimated 6.3 years supply of “ready to go” (G1) zoned and bulk serviced or

serviceable greenfield land in Auckland. This was below the desired average 7 years supply set by the Auckland Plan.

• At 31 December 2016, approved plan variations saw G1 “ready to go” land supply estimated at 9 years, which is 2 years above the required Auckland Plan average.

Auckland Plan 7 year target

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154 special housing areas had been declared in Auckland in 10 separate tranches over 4,871 hectares with an estimated final capacity of over 60,000* dwellings once fully developed.

36 SHAs have been created over 3,166 hectares of greenfield land which will result in over 42,000 homes in the long term.

Special housing areas contribution to land supply by type

Land type SHAs Net area (ha) Estimated yield

FUZ greenfield 21 14% 931 19% 13,676 22%

Live zoned greenfield 15 10% 2,235 46% 28,945 46%

Brownfield 118 77% 1,705 35% 19,756 32%

Average 1,624 20,792

Total 154 100% 4,871 100% 62,377 100%

FUZ greenfield Live zoned greenfield Brownfield

* Auckland Council Dashboard to 31 December 2016 - Actual SHA yields may vary as plan variations and qualifying developments are progressed.

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