A strong construction industry can be a great sign that demand and supply are meeting somewhere in the middle. This would certainly seem to be the case in January, with Statistics New Zealand revealing that the number of dwelling consents expanded 3.6 per cent across the country. 

When you're thinking about residential property investment, it's worth keeping an eye on the building industry as it can show how the housing supply pipeline is tracking. The results for January were promising nationwide. Building approvals overall were 3.6 per cent higher than the same period in 2014, with 1,703 new dwellings approved in January. In fact, Statistics New Zealand data revealed that an impressive total of $645 million of residential work was undertaken in that month alone. 

However, Business Indicators Manager for Statistics New Zealand, Neil Kelly, said that without the booming number of consents for apartments, there has been limited growth. 

"The trend for new dwellings is rising and is at its highest level since July 2007. Excluding apartments, the trend is flat," he said.

There are still signs that Auckland is rapidly running low on new properties – this does wonders for capital growth, but for the first time buyer it could prove a steep hurdle to overcome. The City of Sails recorded the highest number of new properties, with 482 in the pipeline, but this is still significantly below the level needed to meet demand. The Reserve Bank of New Zealand estimates that Auckland's housing shortage rose to between 15,000 and 20,000 properties over 2014, and Auckland Council forecasts that the market needs 10,000 new dwellings over the next thirty years. 

Demand and supply are things to keep in mind when deciding on an investment strategy. Property prices are usually much higher where demand for house outstrips the supply pipeline – as is the case in Auckland. 

Wherever you decide on property investment in New Zealand, getting the right advice is crucial. That's why an Authorised Financial Adviser is such an asset, as they can help you pick out some great options to fit your goals.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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