Auckland Housing Accord Third Quarterly Report for the Fourth Accord Year 1 April to 30 June 2017 Based on data to 30 June 2017 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)) 1
Summary City-wide results to 30 June 2017 show: o o o o More new dwellings (10,364) issued with building consents in the 12 months to 30 June 2017 than in any 12 month period to 30 June since 2004 (when it was 12,937) A 7% increase in dwelling consents on the same period of the previous year (up by 713 from 9,651 consented dwellings) 5,113 dwellings in multi-unit buildings were issued with building consents in the 12 months to 30 June 2017, a 30% increase on the same period in the previous year (up by 1,188 from 3,925) In the third quarter of Accord Year 4, the 1,244 dwellings in multi-unit buildings accounted for 49% of all new dwellings consented (2,517), which is higher than the all three previous Accord years (42% in Accord Year 3; 43% in Accord Year 2; and 38% in Accord Year 1). 154 Special Housing Areas were created over the first 3 years of the Auckland Housing Accord in 10 separate tranches and with an estimated dwelling capacity of over 63,000 dwellings once fully developed. The Auckland Housing Accord total 3-Year section and dwelling consent 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, and year on year the number of sections and dwellings created has increased. At the start of the Accord, the target was challenging with dwellings consented averaging just 470 per month. The monthly average new dwellings consented in the third quarter of Year 4 has risen to 839. The Special Housing Areas have been well used by developers with 56 of them under development. Over 5,200 sections have been created and over 5,500 dwellings have been consented in Special Housing Areas. Only 25 Special Housing Areas have been disestablished with no activity occurring. These account for only 3.3% (2,184 dwellings / sections) of the overall expected yield of the Special Housing Areas. The Auckland Housing Accord has seen a further 23,000 dwellings enabled by the live zoning of 1,683 hectares of land in Special Housing Areas in the Future Urban Zone, creating a strong forward land supply position. At 30 June 2017, the supply of ready to go greenfield land was 7.4 years, 0.4 years over the Auckland Plan target. 2
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 the 12,704 dwellings / sections created were 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. The number of new dwellings issued with building consents in the nine months of Accord Year 4 (7,491) and the number of new sections created (5,732) must each be adjusted for the 1,557 occasions on which they overlap. After adjustment there were net 11,666 dwellings issued with building consents and sections created in the nine months of Accord Year 4. Net number of new dwellings with building consents and sections created Auckland Housing Accord: 31 October 2013 30 June 2017; adjusted for dwelling /section combinations Net number of new dwellings consented and sections created Auckland, 1 October 30 June 2017; adjusted for dwelling/section combinations; Statistics NZ (dwellings); Land Information NZ (sections) Overlap 3
Cumulative long term dwelling supply forecast: increasing impact of SHAs More than 132,000 new greenfield and brownfield dwellings and sections are known to be in the development pipeline, delivering an average of 9,430 dwellings per annum over 14 years (2017-2030). Over 47 per cent of these dwellings will be delivered within Special Housing Areas (expected total yield of over 63,000). All known forecast supply other than SHAs Forecast dwelling supply from SHAs 4
Total new residential sections monthly A total of 5,732 new residential sections under 5000m 2, were created in the nine months of Accord Year 4, at an average of 637 per month. This shows a huge increase on previous years, and the 9 month figure has already surpassed the total of previous Accord years. In total 22,547 new residential sections have been created since the Accord began - an average of 6,012 per annum or 501 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 471 per month in Accord Year 3. Year on year the number of sections created is increasing since the Accord began. 9 months of Accord Year 4 5,732 sections Accord Year 1 5,523 sections Accord Year 2 5,637 sections Accord Year 3 5,655 sections 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. 5
Total new dwellings issued with building consents monthly In the third quarter of Accord Year 4 a total of 2,517 new dwellings were consented at an average of 839 per month. At this rate Auckland Council is on track to deliver over 10,000 new homes with building consents in Accord Year 4. 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 30 June 2017; monthly total; Statistics New Zealand (Infoshare) Accord Year 1 7,403 dwellings Accord Year 2 8,721 dwellings Accord Year 3 10,024 dwellings 9 months of Accord Year 4 7,491 dwellings 6
Total new dwellings consented long term trends The 9 months of Accord Year 4 has recorded an average of 832 new dwellings consented per month. This figure decreased slightly from the first quarter of Accord Year 4, (which recorded 907 - the highest average of new dwellings consented in a quarter since the Accord began) but has increased from the second quarter of Accord Year 4. In total 10,364 new dwellings were consented in the year to 30 June 2017 which was the highest twelve-month total since April 2004, over a decade ago (10,454). Number of new dwellings that received building consent Auckland: 1 January 2000 30 June 2017; monthly total; Statistics New Zealand (Infoshare) 7
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 intensification provided for in the Auckland Unitary Plan is utilised. 1,244 dwellings were consented in multi-unit buildings in the third quarter of Accord Year 4; 49% of all consented dwellings. The multi-unit sector accounts for 50% of all consented dwellings (7,491) in the nine months of Accord Year 4. Housing Accord Year Consented Percentage of dwellings in multiunit buildings dw all consented ellings Year 1 2,842 38.4% Year 2 3,755 43.1% Year 3 4,214 42.0% In the nine months of Year 4 3,731 49.8% Total 14,542 61.6% *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 4,150 to 4,214. 8
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 30 June 2017 (5,113) was the highest 12 month total since May 2005 (5,344), over a decade ago. The monthly average multi-unit dwellings consented has risen from 237 in Accord Year 1 to 415 in the first nine months of Accord Year 4. Year on year the number of multi-unit dwellings continues to increase, reflecting these housing types increasing importance to the Auckland market and the intensification provided for in the Auckland Unitary Plan being realised. Number of new dwellings in multi-unit buildings that received building consent Auckland; 1 January 2000 30 June 2017; monthly total; Statistics New Zealand (Infoshare) 9
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 30 June 2017 (864 per month) is higher than in any 12-month period since 30 April 2005 (871 per month). The 12-monthly average for dwellings in multi-unit buildings to 30 June 2017 (426) is 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 30 June 2017; Statistics New Zealand (Infoshare) 10
Yearly new dwellings issued with building consents More new dwellings (10,364) were issued with building consents in the 12 months to 30 June 2017 than in any 12 month period to 30 June since 2004 (12,937). The 2004 figure is inflated by 5,864 multi-unit dwellings, small in floor area (averaging 98m 2 ) and located in central Auckland. In the year to 30 June 2017, the 5,113 multi-unit dwellings was almost four times the number in the year to 30 June 2013 (1,305), prior to the start of the Accord, and their average floor area was 12% larger than in 2004 at an average 111m 2. The detached dwelling component of the 2017 data (5,251 dwellings) is 74% of that in 2004 (7,073 dwellings). The combined floor area of all residential types in the year to June 2017 (1.78 million m 2 ) was 15% lower than that to June 2004 (2.04 million m 2 ). Number of new dwellings that received building consent in the previous 12 months Auckland: 1 January 1992 30 June 2017; Statistics New Zealand (Infoshare) 11
Dwelling sales prices The Auckland median monthly house price at 30 June 2017 decreased to $850,500 from $890,000 in March 2017. Over the longer term, dwelling prices in Auckland continue to trend upwards, with the average median price for the 12 months to 30 June 2017 increasing to $840,620 from $771,348 in the previous year to 30 June 2016. Monthly median and 12-month moving average dwelling price Auckland; 31 January 2002 30 June 2017; Real Estate Institute of New Zealand 12
Total value of residential building activity in Auckland The value of residential building activity in Auckland was $2.2 billion in the first half of 2017 (January to June 2017), and $4.7 billion in the 12 months to 30 June 2017, which is a 134% weighted average increase from the year to March 2013 total value (before the Accord began). The growth in the value of building activity since June 2013 is due not only to the 104% increase in consented dwellings, but also increases in building cost and type of construction, as well as the building of larger houses. Residential building activity (new plus altered) annual value in $ billions Auckland, 1 January 1992 to 30 June 2017; Statistics New Zealand (Infoshare) 13
Special Housing Areas expected supply The 154 Special Housing Areas are expected to eventually supply over 66,000* dwellings or sections over 20-25 years. The total yield figure is reduced to 63,833 when removing the yield that was anticipated from the 25 Special Housing Areas that have not lodged consents (only a 3.3 per cent reduction). The chart shows that by the end of June 2017, a total of 10,445 sections and dwellings were expected to have been created in the Special Housing Areas. However, by 30 June 2017 there were 10,746 new dwellings consented and sections created in the Special Housing Areas, still trending above supply expectations. * Auckland Council Dashboard to 30 June 2017 - Actual Special Housing Area yields may vary as plan variations and qualifying developments are progressed. 14
Section creation in Special Housing Areas In Accord Year 1 to 30 September 2014, 638 new residential section titles under 5000m 2 were created in Special Housing Areas. In Accord Year 2 a further 605 sections were created and an additional 1,713 in Accord Year 3, bringing total sections created in Special Housing Areas 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. Special Housing Areas accounted for 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 represent 30% of all 5,654 sections created in the year, with Special Housing Areas playing an increasing role in development activity. In the 9 months of Accord Year 4, 2,263 new residential section titles under 5000m 2 were created in Special Housing Areas, making a total of over 5,200 sections for the Accord period to end of June 2017. This total is 43% of all residential sections created in the Accord period. 15
Section creation in Special Housing Areas Section creation can now be seen in 34 Special Housing Areas including the Scott Point Hobsonville Special Housing Area (741), Silverdale (586), Takanini (393), Hobsonville Point (320), Weymouth (304), Belmont (286), Northern Tamaki (252), Whenuapai Village (242), and with highest section creation in Flat Bush (790). 16
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 Special Housing Areas (9.1% of all dwellings consented). Accord Year 3 resulted in a further 1,400 new dwellings consented in Special Housing Areas (14.1% of all dwellings consented). This is more than double the combined numbers in Years 1 and 2. Special Housing Areas continue to provide a rising share of all of Auckland s consenting. Development is accelerating strongly in the Special Housing Areas in the 9 months of Year 4 of the Accord, adding 2,901 consents (39% of all dwellings consented) to bring the total dwellings consented in Special Housing Areas to 5,527. 17
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), Silverdale, Flat Bush Strategic, Hobsonville Point, and Hingaia. Development is also progressing strongly in places like Northern Tamaki, Takanini, Otahuhu Coast and Weymouth. 18
Dwelling completions in Special Housing Areas A total of 3,105 homes have been completed* in 31 Special Housing Areas since the Accord began. On average, this is over 69 homes completed each month since 1 October 2013, and this is anticipated to increase as Special Housing Areas progress further through the development cycle. * Completions 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. 19
Activity in Special Housing Areas At 30 June 2017 there were strong levels of activity occurring in Tranches 1-10 of the 154 Special Housing Areas: 40 Special Housing Areas were having homes being built in them 16 Special Housing Areas had earthworks and site preparations underway Another 73 Special Housing Areas had consents lodged or approved 25 Special Housing Areas were disestablished without any consenting activity occurring. These account for only 2,184 sections/dwellings; only 3% of overall Special Housing Area dwelling yield. Special Housing Area Performance (number of Special Housing Areas (SHAs) and percentage of total number) Auckland, 30 June 2017 20
Special Housing Area status at 30 June 2017 129 Special Housing Areas have lodged consents and are progressing through the stages of development. 25 Special Housing Areas had not been used by the developer. These account for only 2,184 dwellings, only 3% of overall Special Housing Area yield. Status Progressing (Consents lodged) No current progress (Consents not yet lodged) Number of SHAs Estimated yield Sections / dwellings % of total Hectares Area % of total 129 63,833 96.7% 4,830 99.2% 25 2,184 3.3% 41 0.8% Total 154 66,017 100% 4,871 100% 21
Greenfield land supply The Future Urban Zone (FUZ) in the Auckland Unitary Plan provides over 30 years of greenfield land supply to 2012-2047. 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. 1,683 hectares of the FUZ has been live-zoned by plan variation in 15 Special Housing Areas, capable of accommodating over 23,000 new dwellings. Applications for plan variations in two Special Housing Areas were withdrawn as they got their zoning approved through the Unitary Plan process. By 30 June 2017, the Housing Accord plan variations had already contributed 7 years to that outlook and once completed will contribute 9 years of greenfield land supply. 22
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 30 June 2017, approved plan variations saw G1 ready to go land supply estimated at 7.4 years, which is 0.4 years above the required Auckland Plan average. Auckland Plan 7 year target 23
Special Housing Areas contribution to land supply by type 154 Special Housing Areas had been declared in Auckland in 10 separate tranches with an estimated final capacity of over 63,000* sections / dwellings once fully developed. FUZ greenfield Live zoned greenfield Brownfield Land type SHAs Net area (ha) Estimated yield FUZ greenfield 20 13% 904 19% 13,459 20% Live zoned greenfield 16 10% 2,262 46% 30,323 46% Brownfield 118 77% 1,705 35% 22,235 34% Average 1,624 22,006 Total 154 100% 4,871 100% 66,017 ** 100% * Auckland Council Dashboard to 30 June 2017 - Actual Special Housing Area yields may vary as plan variations and qualifying developments are progressed. ** The total estimated yield in Special Housing Areas is over 66,000, reduced to 63,000 when removing the yield of the Special Housing Areas that are not progressing. 24