Value of building consents issued for new housing down $4 billion January year

Property / news

Building consents for new housing sink to their lowest level in five years, Statistics NZ says

1st Mar 24, 12:01pm by Greg Ninness

The number of new homes being built continues its steady decline, with the number of new dwelling consents issued in the 12 months to the end of January down 26.3% compared to the previous 12 months.

According to Statistics NZ, building consents were issued for 36,453 new dwellings in the 12 months to the end of January, down 13,027 from the 49,480 consents issued in the 12 months to January 2023.

That puts the latest annual consent figures at their lowest level in five years. In the January 2019 year new dwelling consents were 33,576. The January 2024 year fall is the first January year fall since 2012.

The biggest decline in percentage terms was for apartments -50.2%, followed by retirement village units -36.6%, stand alone houses -26.3% and townhouses/home units -19.6%.

The total value of new dwellings consented over the year to January (excluding the value of the land) was $16.168 billion, down $4.09 billion (-20.2%).

Around the country there was only one region where consents were up, Gisborne. There, 177 new dwellings were consented in the year to January, up 8.6% compared to the previous 12 months.

The biggest decline was in Tasman District where new dwelling consents were down 45.8% compared to the previous 12 months.

Around the main urban areas, new dwelling consents in Auckland were down 27.7%, Waikato -26.8%, Bay of Plenty -17.9%, Wellington Region -40.6%, Canterbury -23.8% and Otago -19.4%.

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Building consents - type

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Source: Statistics NZ

Building consents - residential

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Source: Statistics NZ

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28 Comments

by HughJorgan | 1st Mar 24, 12:09pm 1709248171

Construction is dead. Its going to need a lot to be revived in a market where prices are likely to stay high.

by construct | 1st Mar 24, 2:56pm 1709258178

Dying. Not dead. Dead indicates it can't get any worse.

by nktokyo | 2nd Mar 24, 11:43am 1709332981

Just had some renovations done and got charge $75/hr for apprentices, let alone the main guys.

by HughJorgan | 1st Mar 24, 12:11pm 1709248268

$/sqm rates are so high 95% of projects are uneconomic. Dosn't matter where or what sector. Everything is grinding to a halt.

$7,000/sqm is replacing the old $4,500/sqm. Something has to give.

by BeeBop | 1st Mar 24, 2:10pm 1709255433

Land prices dropped first.

Trade labour prices dropping.

Materials not quite dropping yet. Some are but others aren't.

Consultants are still putting rates up and that has to give.

Council are in their own world.

Infrastructure needs money.

GST keeps on keeping on.

by ChrisOfNoFame | 2nd Mar 24, 8:44am 1709322241

$7,000/sqm may be last year's number. It's certainly less now.

by Toye | 1st Mar 24, 12:35pm 1709249758

Pipeline is drying up because developers are still sitting on stock that has not been sold for 18 months - suprise suprise.

More house price falls in the coming 12 months and dropping consents will mean less completed dwellings a couple of years down the line which will then again spur prices upwards but from a lower base than today.

by OldSkoolEconomics | 1st Mar 24, 1:38pm 1709253499

Yip we will have low prices, dropping rates, less houses than demand, lots of employment and growing wages, increased immigration and not enuf builders to catch up. Fomo at the auctions.

Deja vu.

by Toye | 1st Mar 24, 2:25pm 1709256359

Probably correct except we have about 2 years of serious pain to get through first and prices will drop, the only question is how much.

by BeeBop | 1st Mar 24, 2:11pm 1709255479

New builds won't drop where a developer can rent it out. Why sell for less than the cost to build unless it is a forced sale.

by Toye | 1st Mar 24, 2:24pm 1709256293

Yeah they will. The cost of debt is higher than rental income.

by Cote d'Azur | 1st Mar 24, 12:37pm 1709249858

Supply crashing, population soaring, rates coming down.

Prepare for many years of house price increases 🥂

by Toye | 1st Mar 24, 12:40pm 1709250051

Number of homes for sale at highest levels I've seen in recent history and still increasing.

Population of unskilled immigrants who can barely afford to rent soaring.

Rates not coming down until Apr 2025 bar a black swan type event.

Where are you getting your hopium? The stuff is clearly STRONG.

by Uncle Bulgaria | 1st Mar 24, 12:54pm 1709250858

Don't disagree with your main thrust but rates will fall this year. The real economy is starting to look incredibly soft.

by Toye | 1st Mar 24, 1:04pm 1709251499

Don't disagree with the possibility that rates could go down this year but that will require the economy to really suffer heavily in the coming 6 months - i.e. massive job losses

If the above happens it will soften the housing market considerably. Once people start losing jobs and having no hope in hell to pay their mortgage payments, stock will increase considerably while FHBs, who are also losing jobs, decide not to enter. The numbers for investors don't work at all at this stage so they won't enter until prices adjust and deductability is fully back.

The worst part is even if we have a drop in say, November 2024, we won't really get proper relief until perhaps a year after as people refix at the new rates.

Either way, there is a minimum of about 2 years of pain ahead of us.

by HouseMouse | 1st Mar 24, 3:06pm 1709258778

Sounds about right.

And then the party will start again in about 2 years, when interest rates are much lower again. Although I suspect the next party will be a bit more subdued

by Kate | 1st Mar 24, 3:13pm 1709259222

rates could go down this year but that will require the economy to really suffer heavily in the coming 6 months - i.e. massive job losses

And the RBG has even said he'll need to see unemployment rise before cutting.

It's a weird world for sure.

by RickStrauss | 1st Mar 24, 3:44pm 1709261084

What did Ireland find about migrant population when they had a crash?

I seem to recall they had a bunch of people leave for a fair while. People who lose jobs or decide that a speculative market has made the country too unpleasant to deal with naff off overseas, when they can.

by ChrisOfNoFame | 1st Mar 24, 1:16pm 1709252216

Central bankers love to talk about 'output gaps' and 'capacity' when they refer to inflation. I.e. too much money chasing too few goods. Like, I dunno, houses perhaps?

Can someone at the RBNZ explain to us why they believe driving the building industry into bust mode helps with increasing output and increasing capacity? And how - in particular - how it helps with house price inflation when the supply of new dwellings just dries up?

(Oh yeah. Just another unintended outcome of that awful tool they use but think is so grand.)

by DTRH | 1st Mar 24, 1:41pm 1709253701

If the government is encouraging opening up land for development this will lower land prices across New Zealand which will make property prices fall much quicker I expect another 20% down over next 18 months and if the crap really it’s the fan much larger price falls will occur.

by Harvey W | 1st Mar 24, 1:53pm 1709254382

20% up in the next 18-24mnths more like it

by longjohndrop | 1st Mar 24, 3:09pm 1709258981

Exactly - land opening up will take 5-10 years. In that time, prices of existing stock will have doubled.

there is no quick answer to this;

development takes time
consents take time
infrastructure takes time
processing titles take time
land sales take time
housing build takes time
compliance certs take time

by Cote d'Azur | 1st Mar 24, 4:02pm 1709262156

John Key quit the ANZ this week, next day went on TV saying house prices will at least double in the next 10yrs.

by ChrisOfNoFame | 2nd Mar 24, 9:09am 1709323798

The Rule of 72 says doubling in 10 years is 7.2% increases p.a.

Watching current auction results and the calculating p.a. increases from the last purchase price and most houses are selling for around 3% to 5% p.a. increases. (Not a few at 1-2% and very few above 6%.)

That aside, methinks Prince John will be wrong on this one as he hasn't factored in supply increases due to intensification. Prince John lived through times when NIMBY councils, elected by the rentier class of grey rinse brigade and pearl clutchers, restricted building supply thus his perspective is warped by that. Younger people have wised up and local government voters will ensure such foolishness does not repeat.

by Cote d'Azur | 1st Mar 24, 4:04pm 1709262292

by HouseMouse | 1st Mar 24, 2:20pm 1709256023

Auckland and Wellington, ouch

by nigelh | 1st Mar 24, 7:11pm 1709273489

Maybe you can now get a house, major house extension built in 4-6months instead of 12-18months a year or two ago. Builders now having to look at what's available to build rather than cocking a snook at projects a year to two years ago.

Certainly prefer this to having builders with the whip hand.

by tis i | 1st Mar 24, 10:31pm 1709285462

If you can afford the materials