New monthly apartment consents at lowest level since 2018

Property / news

The number of new homes being consented continues on a downward spiral, Statistics NZ figures show

31st May 24, 10:44am by Greg Ninness

The number of building consents issued for new homes was flat in April, with consents for new apartments particularly low.

According to Statistics NZ, consents were issued for 2926 new dwellings throughout the country in April, almost unchanged from the 2931 issued in March.

The number of new homes being consented has been on a downward slide for the last two years, dropping from 50,688 in the 12 months to April 2022, to 45,967 in the 12 months to April 2023, and now 35,401 in the 12 months to April this year.

Consents for new apartments were particularly low last month with just 98 new apartment units consented nationwide, which was the first time the number consented in any month of the year has fallen below 100 since October 2018. (See the interactive chart below for the monthly figures for all housing types going back to 1990).

The total value of building work consented for new dwellings was $15.9 billion in the 12 months to April this year, down from $19.2 billion in the 12 months to April 2023, and $19,9 billion in the 12 months to April 2022.

Townhouses and home units remain the most popular types of new dwellings, with 16,133 consented in the 12 months to April this year, followed by stand alone houses 15,397, apartments 2129 and retirement village units 1742.

The value of home improvement work has remained flat for the last three years, with the value of residential consents for structural alterations remaining at $2.5 billion for the last three April years.

However high inflationary pressures in the building industry over that period mean the volume of alteration work undertaken over that time would probably have declined significantly, even though the monetary value remained the same.

Similarly, the value of non-residential building work consented has barely changed over the last two years, at $9.7 billion in the year to April 2023 and $9.6 billion in the 12 months to April this year.

But rising costs in the building industry means the volume of that work has also probably declined.

Non-residential construction includes commercial premises such as shops, offices and factories, as well as non-commercial buildings such as schools and hospitals.

A quarterly analysis of residential building consent trends is available here, and a quarterly analysis of commercial building consent trends is available here.

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Building consents - type

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Source: Statistics NZ

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20 Comments

by donny11 | 31st May 24, 11:41am 1717112512

I feel these sorts of statistics give a much better picture of the real economy than "GDP increases .3% in the second quarter".

It truly captures the real state of affairs.

by ChrisOfNoFame | 31st May 24, 12:03pm 1717113826

Agreed. But also it paints a dire future picture in that it takes roughly two years to get a dwelling built.

That said, there are many of us sitting on previously consented project that just won't start until the RBNZ comes to its senses.

by HouseMouse | 31st May 24, 4:19pm 1717129192

What do you think is the OCR level that kickstarts things again?

I reckon it needs to be south of 4%

by ChrisOfNoFame | 31st May 24, 4:28pm 1717129719

I don't have any particular number in mind.

We just need a signal it is heading down to neutral levels in a steady, well reasoned way.

Like I've already said, November 2023 was a good place to start. Just 0.25% with the warning words "don't expect much more". And then another 0.25% in Feb, 2024. Same words. That'd take us down by just 0.5% to 5.0%. Remember the RBNZ says neutral is between 2.5% and 2.75%. So even at 5% it's still quite restrictive and inflation - assuming the OCR does what the RBNZ claims it does - would have kept falling ... Most probably EXACTLY as it has.

by Murph777 | 31st May 24, 11:54am 1717113273

Perfect timing to be building some apartments :)

Lodging BC Sept 1st

Building companies will be falling over backwards to lock in this project!!

by ChrisOfNoFame | 31st May 24, 12:06pm 1717113975

Yup. I have a 12 apt project lined up for a RC. Sept 1st? Maybe. Depends on whether the RBNZ is telling the truth though ... And what it thinks of the government's budget.

by Eschaton | 31st May 24, 12:44pm 1717116240

Good. Avoid buying an apartment at all costs.

by tothepoint | 31st May 24, 1:40pm 1717119605

Agree.

Many new apartment blocks are a scourge on the landscape.

TTP

by powerupkiwi | 31st May 24, 7:09pm 1717139360

I think boomer villas are a scourge in the landscape, and I hope you all lose your sunlight to an infill

by wingman | 3rd Jun 24, 6:43pm 1717397024

New build villas sell like hotcakes. I built one 3 years ago, and I'm currently building another one. They're the kind of dwelling very suitable for NZ weather. The builder I use specialises in villas, and has work for years ahead.

Cars stop outside my house to check it out, and when it was under construction the builder had 20 inquiries if it was for sale. Kiwis love them, but 100 year old villas can hide some awfully expensive secrets.

by ChrisOfNoFame | 31st May 24, 3:33pm 1717126401

Is your apartment vitriol because you got burned?

Would I be right in guessing that you bought for a capital gain but got none? Or perhaps leaky building because you didn't understand what you were buying? You really need to fess up on this.

Why? Because simply saying, "Avoid buying an apartment at all costs", is pure nonsense as they make excellent yield plays. And done right, way better than any yield you'll get from TDs.

And if you're a FHB, then $400k for a quality 2-bed with a 10-15 year mortgage is sensible buying.

by Eschaton | 31st May 24, 4:32pm 1717129937

Never bought one, never will.

People can do their own pros vs. cons analysis.

If it's your only option, and you're desparate to own or 'invest', so be it. BUT know the risks involved. Unless you have x-ray vision good luck with your due diligence.

The documentary A Living Hell: Apartment Disasters, highlights the risks, but there are also other reasons. An older colleague of mine, who was featured on the show, lost much of her life savings.

by pacifica | 31st May 24, 10:06pm 1717150007

To clarify avoid apartments in NZ at all costs. Many other countries build things vastly differently & with more standards & QA.

by Property Leader | 31st May 24, 12:50pm 1717116615

This is all good news for existing investors like me. Supply and demand or rather the lack of supply is keeping rent prices firm. I met with a public housing official this week. They know of the need for transitional housing and want the private market to supply. Dream on I say. Show me the money.

by Mypointis | 31st May 24, 4:29pm 1717129742

Yup, long term will be great, new houses falling off a cliff, few years down the track and the shortage will be dire again.

by gnx | 31st May 24, 1:35pm 1717119348

I can feel a “trading update” coming from Fletchers next week.

I'm expecting the shares to enter two dollar territory

by ChrisOfNoFame | 31st May 24, 3:31pm 1717126279

Could do.

But if you bought for just under $3 - how soon before you doubled your money? Like always - it's all about their future prospects and less about the entry price. Can you see a price of $6 in 7.2 years? That'd be a 10% y-on-y capital gain. No? Me neither.

by IT GUY | 31st May 24, 3:51pm 1717127484

I would not touch it, probably worth more broken apart...

by mfd | 31st May 24, 4:00pm 1717128044

Depends if the takeover rumours come to anything. May never be a double but could be a 20-30% bailout if it happens.

by wingman | 3rd Jun 24, 5:22pm 1717392125

Apartments...no thanks.

I've owned a couple of industrial properties, one of them for decades, and dealing with some of the tossers and big noters on the body corporate committee has been more than I can tolerate.