Question is - are we at the top of the building cycle, at the top of the unaffordable property cycle or just on the way upwards?
I think that our building industry was focussing (profit driven) on building too many of the dear (and high margin) houses. We probably move towards an oversupply of these which explains the stuttering of the property market. Hopefully, though we don't decide to leave the people sleeping currently in cars, garages and overcrwoded houses in the cold - and start to build more affordable accommodation (i.e. high rises / apartment buildings).
These are cheaper (per unit) but need windows as well.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Question is - are we at the top of the building cycle, at the top of the unaffordable property cycle or just on the way upwards?
I think that our building industry was focussing (profit driven) on building too many of the dear (and high margin) houses. We probably move towards an oversupply of these which explains the stuttering of the property market. Hopefully, though we don't decide to leave the people sleeping currently in cars, garages and overcrwoded houses in the cold - and start to build more affordable accommodation (i.e. high rises / apartment buildings).
These are cheaper (per unit) but need windows as well.
It's an interesting chart. It's my experience that the industry struggles once the consent rate gets toward 2500. Above 2500 is unsustainable. Given the lag between consent and production that last peak would have gone through Metro end of H2 beginning of this H1. H2 should have been smashing it!?
The last dip pretty much coincided with me going 'f* it, I'm sitting on the beach for a month', beer in hand and phone off...
It's an interesting chart. It's my experience that the industry struggles once the consent rate gets toward 2500. Above 2500 is unsustainable. Given the lag between consent and production that last peak would have gone through Metro end of H2 beginning of this H1. H2 should have been smashing it!?
The last dip pretty much coincided with me going 'f* it, I'm sitting on the beach for a month', beer in hand and phone off...
Your experience seems to be confirmed by the chart: only short spikes (in 2007/2008 and 2016/2017) reaching above the 2500 per month. Probably a question for a different thread, but it sort of feels sad if the building industry is not capable to grow with the economy, the demand and the population - something feels wrong here. Nearly 10 years on and they didn't increase their capacity? Lack of planning? Lack of initiative? Lack of rationalisation?
Re H2 smasher - yes, demand for MPG was huge (as demonstrated by their revenue growth), only problem for them was that they didn't knew how to play with all the new toys, and the introduction of three shifts prior to Christmas had its teething problems as well. So - yes, they had the demand (and delivered as well), but the margin suffered.
I am so far cautiously optimistic, they learned from this experience (but time will tell).
Enjoy your beer ...
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Yes once the number of consents gets over 30,000 annually the industry struggles but that hasn't been the only raeson why the building cycle peaks about this level
I'm an advocate of looking at annual rate of change of most economic indicators to give a good feel for where things are heading into the future
For what's it worth here is a chart of the annual change in residential building consents (floor area). The forecast line is my modelling of where the numbers might head based on several factors that impact the housing market (interest rates, bank lending constraints, government/council policies etc etc)
Even though the forecast shows growth in consents heading into negative territory the quantum of consents is unlikely to fall below 28,000 in the next year or so - and that is above the long term average.
This is the MPG thread. Housing activity will keep them pretty busy but I wouldn't bank on a decent increase in the number of houses being built to drive growth.
One good thing MPG have recognised and doing something about is that you can't be under resourced in the upper North Island where the biggest chunk of the market is. But bear in mind the Auckland economy is often at odds to the rest of the country and subject to the same boomn bust cycles but Auckland bust cycles often are deeper
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Yes once the number of consents gets over 30,000 annually the industry struggles but that hasn't been the only raeson why the building cycle peaks about this level
I'm an advocate of looking at annual rate of change of most economic indicators to give a good feel for where things are heading into the future
For what's it worth here is a chart of the annual change in residential building consents (floor area). The forecast line is my modelling of where the numbers might head based on several factors that impact the housing market (interest rates, bank lending constraints, government/council policies etc etc)
Even though the forecast shows growth in consents heading into negative territory the quantum of consents is unlikely to fall below 28,000 in the next year or so - and that is above the long term average.
This is the MPG thread. Housing activity will keep them pretty busy but I wouldn't bank on a decent increase in the number of houses being built to drive growth.
One good thing MPG have recognised and doing something about is that you can't be under resourced in the upper North Island where the biggest chunk of the market is. But bear in mind the Auckland economy is often at odds to the rest of the country and subject to the same boomn bust cycles but Auckland bust cycles often are deeper
Wow that chart is SUPER! I have noticed trends related to floor area, but have never had an incling that there would be statistics to back it up!
Wow that chart is SUPER! I have noticed trends related to floor area, but have never had an incling that there would be statistics to back it up!
Sort of allows for more stuff (windows etc) going into bigger dwellings than smaller dwellings .....and if apartments/units (smaller average size) have above or below % of total consents (like auckland apartment boom mid 2000's)
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Originally Posted by winner69
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