Rise in new-builds puts pressure on Hawke's Bay builders and cost of homes

A new house takes shape on Ferguson Avenue, Napier. Photo / Paul Taylor.

Hawke's Bay builders are bucking the national trend with the value of new home builds up $7 million last month, as the rest of the country experiences a slow-down.

Figures from Statistics New Zealand show 55 building consents were granted for new dwellings in Hawke's Bay last month, worth a combined value of $23m. That was up from 46 consents (worth $15m) in July last year, and up from $16m in June this year.

A total of $136m-worth of new dwellings have now been consented since the start of the year but Registered Master Builders Association Hawke's Bay president Scott Taylor said while that was 'incredible" for the region, the "huge" demand also meant added pressures.

"The demand is going to put massive pressure on infrastructure and suppliers, and that's what we're seeing at the moment.

"Unequivocally, we are experiencing some increases in market volatility that haven't been seen here in quite a while. The level of numbers we are seeing are huge."

FOR MORE PROPERTY NEWS AND LISTINGS GO TO ONEROOF.CO.NZ

Taylor said without existing land availability and council infrastructure suppliers, subcontractor capacity constraints, those numbers could be even higher.

However, rising land prices also meant higher costs for people wanting new homes.

"It is great for Hawke's Bay, but expectations from the public around residential housing availability and costs are quite different from reality.

"It's a tough time at the moment for builders, trying to keep up with the rising labour and material costs, fixed price contracts demanded by banks and ever increasing rules and regulations."

Nationally, the number of new homes consented fell a seasonally adjusted 10 percent in July 2018, Stats NZ said.

"The number of new homes consented can be quite volatile on a monthly basis, particularly as the number of apartments consented tends to fluctuate a lot," construction indicators manager Melissa McKenzie said.

"Looking at the longer-term picture, we are seeing growth in building consents for apartments and townhouses, while consents for stand-alone houses have been quite flat over the past two years."