The number of new homes consented hit an all time high in the fourth quarter of last year

Property

Residential construction continues to rocket ahead but non-residential construction is still a bit slow

4th Feb 21, 11:55am by Greg Ninness

Residential construction shows no sign of slowing down with the number of new homes consented hitting a record high in the fourth quarter of last year.

According to Statistics NZ, 11,291 new dwellings were consented in the fourth quarter of 2020, surpassing the previous quarterly record of 10,713 set in 1973.

That took the total number of new homes consented last year to 39,420, up 4.8% from 2019, which is impressive given that 2020's figures were affected by the COVID-19 lockdowns.

That suggests a record number of new homes could be consented this year if current trends continue.

However the number of homes being consented is still low compared to population size.

"If population size is considered, the figures from the 1970s are still much higher," Statistics NZ's construction statistics manager Michael Heslop said.

In 1973, 13.4 new homes were consented per 1000 residents, but in 2020 just 7.8 homes were consented per 1000 residents, Statistics NZ said in its release with the latest figures.

While the overall growth in new homes consented was almost 5% last year, there were some surprising changes in the mix of homes being consented.

The number of apartments consented was down 21.5% compared to the previous year, after 34.1% growth in 2019, while retirement village units were down 21.9%, reversing the 30.6% growth achieved in 2019.

The big growth was in townhouses and home units, which were up 41.4% last year following growth of 26.5% the year before that.

Stand alone houses are still the biggest category of homes being built but their numbers were almost unchanged last year compared to 2019 (see the first chart below for the monthly trends in housing types being consented).

In Auckland 16,656 new homes were consented last year, up 9.9% compared to 2019.

Other regions to record substantial growth in new dwelling consents last year compared to 2019 were Hawke's Bay +46.6%, Taranaki +25.0%, Manawatu/Whanganui +8.8%, Tasman +10.0%, and Canterbury +11.1%.

However the number of homes consented was down compared to 2019 in Northland -11.1%, Waikato -5.1%, Gisborne -3.0%, Wellington -5.1%, Nelson -18.9%, Marlborough -11.2%, West Coast -17.3%, Otago -13.4% and Southland -5.8% (see the second chart below for the monthly trends in all regions).

The total value of building work for all of the new homes consented last year was $14.533 billion, up 4.6% on 2019.

The commercial construction sector did not fare so well last year, with consents for $7.047 billion on non-residential building work issued in 2020, down 5.5% compared to 2019.

The total value of all building work consented last year was $24.078 billion, up 0.7% compared to 2019.

The comment stream on this story is now closed.

You can have articles like this delivered directly to you inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, go to our email sign up page, scroll down to option 6 to select the Property Newsletter, enter your email address and hit the Sign Me Up button.

Building consents - type

Select chart tabs

Source: Statistics NZ

Building consents - residential

Select chart tabs

Source: Statistics NZ

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

24 Comments

by Thinker | 4th Feb 21, 12:08pm 1612393686

Good stuff, just need another at least 5 years of that load to catch-up.

by karl seastrand | 4th Feb 21, 12:47pm 1612396040

It is good stuff but another 5 years of that will only (hopefully) compensate for the estimated (unnecessary) population growth of 100K PA, which will no doubt recommence pretty soon. So maybe not a catch up but more a case of not continuing to go backwards.

by Advisor | 4th Feb 21, 1:48pm 1612399714

Several factors suggest that we could easily beat the pre-Covid net migration trend of 100k p.a. or so once our borders reopen.
There is the obvious pent up demand for skills in our economy - most of which is actually a cover for shoddy businesses seeking wage suppression and rental inflation.

Hundreds of thousands of economic refugees will gladly take our high-cost, low-wage country over their overcrowded hometowns left battered by the Covid-led recession.

by Fritz | 4th Feb 21, 12:37pm 1612395424

Good progress.
The discrepancy though between the early 1970s and now though is even greater than it appears as household sizes are much smaller on average now.

by Squishy | 4th Feb 21, 1:25pm 1612398334

I'm waiting for the border reopening, there is a Tsunami of overwhelming demand waiting to be unleashed upon the unsuspecting population.

"Give us your retired, your whores, your huddled masses yearning to buy property, the middle class refuse of your teeming shore..." ;-)

by CourtJester | 4th Feb 21, 1:33pm 1612398789

But what's gonna happen to all the rich kiwis who (supposedly) returned from overseas last year? Wouldn't that (mythical) horde go back to the UK and Aus as soon as possible?

by kiwikeith | 4th Feb 21, 1:38pm 1612399118

Lets hope Adern does not revert to mass migration once the border reopens.. maybe the supply demand imbalance will correct itself.

by Uncle Bulgaria | 4th Feb 21, 1:57pm 1612400229

GDP only grows if population does. Of course the borders open back up.

by karl seastrand | 4th Feb 21, 2:23pm 1612401814

But more importantly, does GDP per capita grow?

by CourtJester | 4th Feb 21, 2:39pm 1612402790

Umm... well... Hey look, a climate emergency!

by J.C. | 4th Feb 21, 6:13pm 1612415621

But more importantly, does GDP per capita grow?

No. But the govt and the media don't talk about GDP per capita. It's a good metric to understand the fraud when they hold up the GDP chart and tell the sheeple how great economic growth is.

by Uncle Bulgaria | 4th Feb 21, 1:56pm 1612400169

Wellington is a problem

by mikekirk29 | 4th Feb 21, 2:48pm 1612403329

Apartment consents down 21%. Surprising ?
Er, CV19 flight from centre. + No foreign students etc
Last 7m sales in Auckland Central, compared to a year earlier = down 1.3% (yes, I said down)
Meanwhile NSC sales up 64%
If population is dense (no laughing...) then their off

by Dale Smith | 4th Feb 21, 4:50pm 1612410614

'in 2020 just 7.8 homes consented per 1000 residents,'

You need 3 per 1000 just to replace obsolete homes.

Shame we can't get a rolling average but as I understand it this consent per 1000 is a new stat. for Statistics NZ.

by CWBW | 4th Feb 21, 5:19pm 1612412398

They can try ramping the consents to 70's levels and shut the country down from migrants and returnees but it will do nothing to the increasing median house prices.

It's time to act now for FHB! You may not find your ideal house but get your foot in the door first- you will have options later only when you're already in!

Every metric points towards a diminishing end point in the buying capacity for the average FHB this year. Banking on the lovelies in the Beehive for help will only cause you more misery- the more they meddle with the market the more oppose their desired results becomes. As of today, it costs you over $500 a day waiting and will only become dearer for the rest of the year.

Stop subscribing to flat-earthers, property bears and doomsday prophets; they like to throw economic terms to credify their vaporware theories, with little understanding of what they're talking about and had been proven wrong for years on end.

Wishing you all well in your property adventure and a new quest in life.

by J.C. | 4th Feb 21, 6:15pm 1612415710

Your post reads like a troll narrative.

by Rob Reid | 4th Feb 21, 9:37pm 1612427855

LOL.
It had almost everything tossed in except "Owning your own home is the only way to gain security and stability for you and your family."

by BigDaddy | 4th Feb 21, 9:10pm 1612426231

The fundamental problem is that FHBs want to start where their parents finished off.

by Rob Reid | 4th Feb 21, 9:39pm 1612427959

Their grandparents, not parents.
And yes, the 1950s.

by Dale Smith | 4th Feb 21, 9:58pm 1612429125

Yes, they would like to start at 3x median income multiple.

by Nzdan | 5th Feb 21, 7:32am 1612463557

Not at all, they want to start in the vicinity of where their parents started off. Not sure where you got your idea from, it's not like FHB's set the home start grant level higher for new builds than existing builds. FHB's didn't invite investors to compete with them in the lower end of the market where the investment yield is, something their parents didn't have to battle with in their day.

by LASSET | 5th Feb 21, 4:26pm 1612495570

I'd be extremely happy to start in my parents first home where I grew up. 3 bedrooms on a big section in a nice suburb. Section cost plus the Lockwood house built on it, all for 4 years of Dad's salary. Mum didn't work of course.

by Property Leader | 5th Feb 21, 8:20am 1612466416

I purchased my first home in 1973 and it is hard to remember what was happening then and why so many houses were being built. The question seems to be is history repeating itself? Uk entered EEC then and that along with oil shocks pushed us into a decade of economic problems. This year UK is leaving EEC and wants to have its marriage back. I do not want another decade of suffering. We will suffer if we trust them again. We have all figured we are located South of China and that is what is going to influence our lives even if we cannot speak their language.

by DoTheMath | 5th Feb 21, 12:54pm 1612482847

Better slow down. If the housing shortage ends how will we keep the small price increases going?