New building consents suggest residential construction will remain strong, commercial construction will be even stronger

Property / news

The number of new homes being consented is flattening but there's still strong growth in residential alteration work and commercial building consents

30th Sep 22, 12:06pm by Greg Ninness

The building industry shows no sign of slowing down but the latest building consent figures suggest the residential construction market has peaked.

There were 4547 new dwellings consented in August, barely changed (+0.9%) from the 4508 consented in August last year.

That took the total number of new dwellings consented to 50,653 for the 12 months to the end of August, up 8.9% for the previous 12 months.

Stand-alone houses remain the most popular type of new dwelling, with 23,060 consented in the year to August, although their numbers are declining and were down 8.9% compared to the previous 12 months.

Townhouses and home units remain the second most popular option with 20,681 consented in the year to August with their numbers growing spectacularly, up 41.7% compared to the previous 12 months.

Growth in new apartments appears to be taking a breather, with 4096 being consented in the 12 months to August, almost unchanged from 4094 in the previous 12 months.

There were also 2816 retirement village units consented in the 12 months to August, up 11.5% on a year earlier.

However while the number of new dwellings being consented may have flattened, it appears costs have not.

Although the total number of new dwelling consents issued in August was up just 0.9% on August last year, the total value of those consents was up 12.9% at $1.912 billion for the month. (A more detailed quarterly breakdown of consents including average value and average value per square metre, by dwelling type and region, is available on our Residential Building Consent Analysis page).

On top of that another $249 million of residential alteration work was consented in August, up 26.7% on August last year.

That took the total value of residential building work consented in August to $2.161 billion, up 14.3% on a year earlier.

In the 12 months to August, $22.856 billion of residential building work was consented, up 16.1% on the previous 12 months.

While those figures suggest a strong pipeline of new work for residential construction, the outlook for the non-residential building industry appears even more robust.

The total value of non-residential building work, which includes commercial buildings such as shops, offices and factories, as well as non-commercial buildings such as schools and hospitals, was just $2 million shy of $1 billion in August, up 22.3% compared to August last year.

In the 12 months to August, non-residential building work consented was worth $9.167 billion, up 14.3% on the previous 12 months. (A more detailed quarterly breakdown of consents issued for the main commercial building types including average floor area and average value per square metre, is available on our Commercial Building Consent Analyisis page).

That took the total value of all building work consented in the 12 months to August to $32.023 billion, up 15.6% on the previous 12 months.

The comment stream on this story is now closed.

Building consents - type

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Source: Statistics NZ

Building consents - residential

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Source: Statistics NZ

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19 Comments

by HouseMouse | 30th Sep 22, 12:23pm 1664493798

Bit more critical thinking required, Greg.

For example how do these stats marry with yesterday’s atrocious results in the ANZ survey, in terms of confidence in the residential construction sector?

by Pa1nter | 30th Sep 22, 12:35pm 1664494510

The wider population frequently acts the opposite of what "those in the know" are proclaiming.

You cant build anything without a consent, we all probably know a certain percentage won't break ground anytime soon due to the lag between wanting to get something permitted and the realities of actually building something.

If I could summarise what's coming across the quotes desk at the moment, housing has definitely dropped away (although in fairness it's also not on my radar so much), government spending is ramping a bit, and commercial is holding steady.

by HouseMouse | 30th Sep 22, 12:47pm 1664495251

This data is for August. As I have said before many of these consents would have been lodged early in the year when sentiment was quite a lot better.

Given all the work and cost to get a consent, and it’s a sunken cost, even as things deteriorated from June/July many developers would just be keen to get their building consents and their development rights.

by HW2 | 30th Sep 22, 6:03pm 1664514223

How utterly rude

What a prick

by HouseMouse | 30th Sep 22, 6:23pm 1664515386

Why? I come to this website for critical analysis, not just telling me the stats which I can get myself. This website published a story yesterday about the atrocious level of confidence in the residential construction sector. Good journalism and analysis would mention that in this analysis, as this data is lagging and the ANZ survey is very current. The survey moderates the distortion presented by this data.

I need better analysis if I am to support this website financially. Too often it falls on the readers / commenters to do the analysis.

What is rude is calling someone a name, just like you have done.

by Pa1nter | 30th Sep 22, 6:35pm 1664516149

Not every article is critical analysis, maybe not everyone wants to go fishing for the latest stats.

Pretty common to see articles that contravene other recent articles. Maybe that's called balance.

by HouseMouse | 30th Sep 22, 7:22pm 1664518930

Nope.

It’s poor journalism.

Good, balanced journalism would refer to yesterday’s ANZ survey.

by HW2 | 30th Sep 22, 7:36pm 1664519801

I guess you could always offer your standards of excellence and sage advice to interest.co. They probably would leap at the chance of on-boarding the former ESL teacher now transformed into a self confessed top rating economist. Who knows.

by HouseMouse | 30th Sep 22, 8:09pm 1664521757

Have a nice evening, and watch out for your problem drinking down there in Dullsville.

by HW2 | 30th Sep 22, 8:46pm 1664523979

Says the man who lives in a terrace

by HouseMouse | 30th Sep 22, 12:52pm 1664495569

Just had a look at this website’s‘Resident Building Consents Analysis’ page.

Those per square metre $ values from Stats NZ are a crock. For townhouses, no way they are circa $2600. More like $3500-4000

by BeeBop | 1st Oct 22, 6:59am 1664560744

I have real data and $2600 would have been the price as of last year and maybe even very early this year. Now, through a third party, the prices (if apples with apples) would be +$3200 - rental standard nothing too flash and limited landscaping etc.

by Tee | 30th Sep 22, 12:53pm 1664495604

Another two years or so, the picture might be clearer.

by rastus1 | 30th Sep 22, 1:37pm 1664498237

For a glimpse of what is upon us have a chat with your local car dealer - one who deals in Utes.

Can't move them.

by BeeBop | 1st Oct 22, 7:01am 1664560876

And utes were the biggest seller last year!!! Toys are being sold now too...

by ikimpaul | 30th Sep 22, 1:55pm 1664499342

Hutt Valley Market 26^th Sept

First home buyers returning to the market - are new homes part of the reason

Lots of talk this week in the media about first home buyers returning to the market.

Starting to see this within the Hutt Valley along with the upper quartile buyers abandoning the market with just 9 houses over $1 million selling in the last 2 months compared to 26 houses selling for under 800 000.

A key factor would be the reduction in prices - a quarter of the houses listed in the hutt valley are under 700K - but also a big factor would be the reduction in competition for the bottom quartile with investors transferring to new houses to take advantage of the tax benefits offered with a new build versus the existing build.

Unfortunately I dont track sales of new builds but judging by the number of new build listings with just this week 6 of the weeks 25 listings are for either newly built or off the plan listings (approx 20%) there is an ongoing demand for this segment of the market.

Which is good news for first home buyers and renters as the more properties available the lower house prices and rents will be

Current Market Listings

505 houses on the market- Down 15 on last week .

Average number of houses sold each week 25. This data has now been consistent since March with between 90 and 100 houses selling per month according to the REINZ data

505 houses on the market with 25 a week selling means there is 20.0 weeks stock on the market.

House Price Reductions

254 houses have a listed price

65% of the houses listed with a price have reduced their price since listing

The average markdown has increased this week from 106K to $107K.

Of those that have listed prices (pool 254) 49 have reduced their prices by 100K

16 have reduced their prices by over 200K, 6 have reduced their prices by 300K and 1 has reduced their price by 400K and 1 has reduced their price by a massive $595K.

The Median house price for all 505 listings is down from $779K to $775K this week

Market Valuations

The latest QV valuations (valuations by QV which are updated every month and give an approximation of a houses value) have now dropped $250K since Jan for the Hutt.

The latest QV valuations will be used this month to calculate the new RV’s for Lower Hutt. These will be released in Nov.

Homes is showing prices dropped roughly 2.5% in August alone – with most suburbs recording a drop of 25-35K for the month.

The latest round of homes updates came through last week show the following

Woburn (the hutts most expensive suburb) – average house price is down 310K from $1.66M (in Feb 22) to $1.35M, this is a 6% drop YOY and was a 35K drop from Aug

Petone is down $220K from $1.19M in Feb to $970K This is a 13% drop YOY and a 25K drop from Aug

Wainuiomata (the huts cheapest suburb and attractive to investors and FHB’s) is down $175K from $870K in Feb to $695K. this is a 13% drop YOY and a 25K drop from Aug.

Houses sold vs houses removed

My records show 326 houses listed with a Price have sold YTD

I have records of a further 286 houses that have been removed from the market unsold YTD.

30 of those houses removed from the market have been listed on the rental market.

Length of time on the Market

375 houses have been on the market for over 30 days - 74% (last week it was 390)

274 houses have been on the market for over 60 days - 54% (last week it was 302)

218 houses have been on the market for over 90 days – 43% (last week was 237)

178 houses have been on the market for over 120 days - 35% (last week was 158)

110 of the houses have been on the market for over 150 days - 22%

65 of the houses have been on the market for over 180 days (6 months) – 13%

24 of the properties have been on the market since 2021 – 4.6%

Rental Market

This week the rental market has 206 properties for rent (up 7 on last week) up 93 on this time last year, – when 113 houses were for rent. This is the highest number of rentals on the market since July.

The percentage of properties listed at $650 is at 38%. This is the 10th week in a row where the percentage of rentals over $650 has been less than 40%.

Median Rental price for the Hutt valley is $600 a week (this is slightly up from the previous $595 a week midpoint)

by nigelh | 30th Sep 22, 5:53pm 1664513626

Of interest to me is those houses that have been on the market > 150days. My own interpretation of this is that the owners don't really want sell unless they achieve their asking price. It will sell if you are prepared to meet the sellers price. If they really wanted to sell it would fall in under a 90 day sale.

by Squishy | 30th Sep 22, 3:48pm 1664506124

People where so sure it'd cliff edge due to rates. Life goes on despite inflation and supply chains.

by K.W. | 30th Sep 22, 5:44pm 1664513047

Just because something is consented, doesnt mean its going to be built. Developers now need to try and sell them off the plan and get finance before being able to break ground. Seeing quite a few sections with consents and house plans returning to the market at the moment.