Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on the recent drop in housing consents

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Brad Olsen: Infometrics Principal Economist on the recent drop in housing consents · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk ZEDB. Follow
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  Speaker 2: Signs of a gradual turnaround in the building sector. New
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  Speaker 2: stats and Z figures out today. They show new home
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  Speaker 2: building consents down seven point two percent annually to January,
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  Speaker 2: but eleven percent more homes were concented that month compared
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  Speaker 2: to the year before. Brad Olson's the infometric CEO. He's
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  Speaker 2: with us, Hi, Brad good evening. So what are we
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  Speaker 2: making of this?
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  Speaker 3: Well, look, I think the fact that you're seeing on
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  Speaker 3: a sort of looking at the January month compared to
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  Speaker 3: where it was a year ago, you've seen a bit
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  Speaker 3: of a tick up. There's definitely a bit of a
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  Speaker 3: shift coming through, and it reinforces our view looking through
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  Speaker 3: in these figures that actually there's effectively a bit of
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  Speaker 3: a stabilization starting to come through. Yes, overall over the
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  Speaker 3: last twelve months, the number of consents are lower than
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  Speaker 3: the twelve months before that, but that's because we had
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  Speaker 3: seen sort of such a big pullback, but realistically down
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  Speaker 3: seven point two on their annual basis over the last
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  Speaker 3: twelve months. At one point it was down something like
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  Speaker 3: twenty five percent, so we're starting to see that shift
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  Speaker 3: gradually emerging. What I think was interesting when we dug
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  Speaker 3: through into the numbers was the fact that you've got
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  Speaker 3: quite a strong drive in recent times coming through from
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  Speaker 3: Canterbury and Otago, some of the biggest contributions from those areas,
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  Speaker 3: and also a bit of a notch upward in townhouse consent.
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  Speaker 3: So again, look, the numbers are still in a more
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  Speaker 3: challenging spot, but after the construction's gone from what fifty
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  Speaker 3: one thousand consents going back a couple of years now,
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  Speaker 3: we're thinking things stabilize more around the thirty three to
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  Speaker 3: thirty five thousand marks, so down but also not out interesting.
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  Speaker 2: That the average floor area for a standalone house was
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  Speaker 2: one hundred and seventy six square meters. That's down from
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  Speaker 2: one hundred and eighty three the year before, and the
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  Speaker 2: lowest for any year into January since nineteen ninety four.
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  Speaker 2: Is that part of the townhouse thing?
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  Speaker 3: No, I mean those were the standalone figures themselves. So
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  Speaker 3: you know that's a that's it attached to our right
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  Speaker 3: if you will, But you're right, I mean, look at it.
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  Speaker 3: It's notable that those that effectively your house area is
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  Speaker 3: becoming smaller. Maybe we've all got into the Marie condo
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  Speaker 3: and now we can sort of exist with a small
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  Speaker 3: amount of space realistically. Of course, it's actually because people
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  Speaker 3: have been paying so much for houses that we are
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  Speaker 3: looking for those sort of smaller options. And I think
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  Speaker 3: it's also interesting like building consents in the size of
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  Speaker 3: the floor area often dictates or is dictated by what
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  Speaker 3: people are looking to buy. Now. Yes, people might be
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  Speaker 3: feeling forced to buy smaller and build smaller because of
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  Speaker 3: the financial restraints, but it also suggests that, you know,
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  Speaker 3: because we have gotten more use to some of the
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  Speaker 3: denser dwelling in townhouses and apartments, obviously there's a bit
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  Speaker 3: of a shift where keiws are able to make that
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  Speaker 3: work a bit better and be a bit more affordable
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  Speaker 3: than before. So definitely a bit of a shift coming
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  Speaker 3: through there. In terms of the land size. People are
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  Speaker 3: going to have to get pretty good at where they
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  Speaker 3: store stuff.
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  Speaker 2: Yeah, that's one of the troubles that I have at
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  Speaker 2: my place because our place is tiny, But the thing
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  Speaker 2: is you do get used to it. And also not
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  Speaker 2: having a big backyard. I think everybody wants a big backyard,
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  Speaker 2: but then once you live without one you've kind of
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  Speaker 2: realize you can do without it, well.
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  Speaker 3: Until you've got a lawn and trees that have got
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  Speaker 3: to be looked after a ride. You know, it's great
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  Speaker 3: in summer and then it sort of becomes a bit
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  Speaker 3: unkempt and hard to look after. I think as well,
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  Speaker 3: when it comes to space, the more space you have,
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  Speaker 3: the more space you can fill up, Like I feel
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  Speaker 3: like your collection of clutter can sometimes grow to fill
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  Speaker 3: whatever you've got.
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  Speaker 1: Now.
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  Speaker 3: Like I say, I do think that actually the driving
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  Speaker 3: force behind this is more around affordability and what Kiwis
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  Speaker 3: are able to pay when it comes to housing, and
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  Speaker 3: so that's obviously a challenge. But I do think as
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  Speaker 3: well it reflects the fact that over time we have
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  Speaker 3: seen a real shift in how Kewis are living. I
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  Speaker 3: mean the fact that you know people are buying in
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  Speaker 3: different groups. It's not just sort of a couple anymore.
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  Speaker 3: You know that there's different sort of formations of who's
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  Speaker 3: buying a house, what people need in them. The fact
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  Speaker 3: that you sort of you don't necessarily need a spare
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  Speaker 3: bedroom anymore. You need an office space that maybe has
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  Speaker 3: pull out couch for when mates come over. Like the
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  Speaker 3: entire way that New Zealanders a living is shifting and
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  Speaker 3: I think that's what these numbers are reflecting as well.
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  Speaker 2: Interesting stuff, Brad, Thank you for that. Brad Olsen, who's
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  Speaker 2: the informatric CEO.
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