Mike Blackburn: Construction Analyst on the boom in housing consents and construction in Canterbury

Internal migration is driving a boom in Canterbury housing construction. 

The region's councils consented around 6,500 homes in the past year – a fifth of the country's new builds. 

Construction Analyst Mike Blackburn told Francesca Rudkin that it largely down to comparative house price values. 

He says people can buy a brand new home in Selwyn or other parts of Canterbury for substantially less than Auckland and Wellington equivalents. 

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Episode Transcript

Speaker 1 (00:00):
Right.

Speaker 2 (00:00):
Construction in the South is booming, with one in five
new Zealand homes being built in Canterbury. In the past year,
six five hundred new homes were consented by Canterbury councils,
equating to nine point four homes per thousand residents, the
highest rate in the country. Canterbury is also the only
region still building more homes than before the COVID pandemic.

(00:21):
Construction analyst Mike Blackburn joins me, Now, thank you for.

Speaker 1 (00:24):
Your time, Mike, Good morning, Francesca.

Speaker 2 (00:27):
So why is Canterbury growing so much more than the
rest of the country.

Speaker 1 (00:31):
Well, look, I think there's a number of combinations. Firstly,
following the extraordinary peak of building activity in twenty twenty
one and twenty twenty two, the building concent numbers across
the whole country declined significantly, and unfortunately for many other

(00:53):
parts of the country, building concent numbers are continuing to decline.
One of the reasons why Canterbury as a stand out
region at the moment is that those numbers have plateaued
and an actual factor, the numbers that I've been tracking
have actually shown a slight increase over the last six
months or so, and The number one reason why Canterbury

(01:14):
has continued to do so well is primarily because of
internal migration. So that's people moving from other places in
New Zealand to Canterbury.

Speaker 2 (01:24):
Well, why wouldn't you construction? I believe that construction costs
in Christy to the second highest in New Zealand. That
doesn't seem to be slowing things.

Speaker 1 (01:32):
Down, looks I'm not so convinced about that. Certainly, when
you look at the average price of a residential house
here in christ Church or or sort of certainly the
wider Canterbury area, it's it's at around about seven hundred
and thirty thousand dollars, and that's sort of significantly cheaper,

(01:52):
you know, twenty percent twenty five percent cheaper than a
new house in Auckland. And so I think that's another
reason why we are seeing people wanting to sort of
move down here is the fact that overall the economic
in Canterbury is actually pretty good. Jobs are relatively against
the trend of the rest of the country where we're

(02:14):
seeing a rise in unemployment. Jobs are still relatively plentiful
here in christ Church. Pay rates relatively on average with
many of our other larger cities and of course this
is the reason why people are choosing to sort of
relocate here to Canterbury. If you can, if you don't
have to be tied to a desk in an Auckland

(02:35):
or Hamilton, and you can get a job down here
in lovely Canterbury, then it's a little bit like winning lotto.

Speaker 2 (02:44):
So the number of consents is high, people actually buying
these homes. Is the demand there?

Speaker 1 (02:51):
Yes, yes, Look, I spent sort of all day long
talking to builders, developers, realist that agents, and they're saying that.
Certainly over the last next months, the telephone has started
to ring again. Sales inquiries are up again, just reinforcing
what I said about people moving in from other parts
of the country. They're also seeing that same sort of

(03:12):
level of demand from people outside of Canterbury. So look,
relative to the number of dwellings that were being consented
a couple of years ago, year the market is down.
But look, I think that Canterbury is very very well
placed to come out of the currents that have downturn
much much faster than the rest of the country. The

(03:33):
current building consent numbers reinforce that, and I'm really really
positive about the next couple of years for new house
construction here in Canterbury.

Speaker 2 (03:41):
I was just about to say will it last?

Speaker 1 (03:44):
Look Look, I think I think it will. I mean
population growth is that as the number one driver for
why we build new houses. Look, Selwyn has been one
of the fastest growing regions in New Zealand for the
last three or four year years. There's a number of
combinations which sort of we need to build houses effectively.

(04:06):
You did mention before about the cost of construction. Obviously
a number of the changes that the government are proposing
to make it easier and cheaper to build houses will
go a long way. Fast tracked land development has been
another key thing to make sure that we've got plenty
of land supply going forward. I think that certainly here

(04:27):
in Canterbury, it's a very very popular place. House prices
are proportionately much much better. The economy's looking really, really good.
I think it's going to be a great couple of
years for building houses.

Speaker 2 (04:40):
Mike, really nice to talk to you. That was Mike
Blackburn there. I don't worry about Australia. Head to christ
Church Folks.

Speaker 1 (04:46):
For more from earlier edition with Ryan Bridge. Listen live
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