There's good and bad news in the latest building consent figures for anyone looking to buy a new home.
The good news is the building costs appeared to flatten out in the fourth quarter of last year, but the bad news is the number of new dwellings being consented continues to decline.
Interest.co.nz's latest Residential Building Consent Analysis shows the average consented build cost of new dwellings was $3230 per square metre in the fourth quarter (Q4) last year, barely changed from $3225 in the third quarter (Q3) of 2023.
That flattening in average build costs comes after three years of steadily rising costs.
Since the first quarter of 2021 the average consented build cost for new dwellings has risen from $2436 per square metre to $3230 per square metre at the end of last year, up by a third over the three year period.
Unfortunately the stabilisation of building costs did not apply to all dwelling types.
Average consented build costs for stand alone houses, townhouses and home units and retirement village units were all either flat or in decline in Q4 last year, while apartment build costs shot up to a record high of $6263 per square metre, up 17% compared to Q3 last year.
While average build costs were flat overall, the number of new homes being consented continued to decline.
Just 8505 new dwellings were consented throughout the country in Q4 2023, which was the lowest number consented in any quarter since Q4 2018.
The number of new homes being consented peaked at 13,251 in Q3 2021, so numbers are now down by 36% from their peak (see second graph below).
So while residential construction costs appear to be mostly stabilising, at some stage there is likely to be significantly fewer new homes becoming available.
The full analysis of residential building trends, including regional figures for Auckland, Waikato, Bay of Plenty, Wellington, Canterbury and Otago, is available on our Residential Consent Analysis page.
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