A third fewer new homes consented annually compared to two years ago

Property / news

Annual value of new residential construction being consented down $5b over the last two years

2nd Dec 24, 11:41am by Greg Ninness

The number of building consents being issued for new homes continues to decline. On an annual basis it's now at a five year low.

The latest figures from Statistics NZ show 33,467 new dwellings throughout the country were consented in the 12 months to October this year. That's down 16.1% compared to the 12 months ended October last year, and down 33.4% compared to the October year peak of 50,252 in 2022.

The 33,467 new dwellings consented in the 12 months to October this year was the lowest number for that period since 2018.

That means fewer new residential building projects getting started, and down the track fewer new homes becoming available.

The decline in consents affected all housing types but some worse than others.

The biggest decline in percentage terms was for apartments, with their numbers almost halved (-46.8%) in the 12 months to October this year compared to the same period last year, followed by retirement village units -35.0%, townhouses and home units -20.0% and stand alone houses -2.8%.

Although the annual decline in the number of houses being consented was relatively modest, it followed two years of substantial declines of -26.2% compared to the year to October 2023 and -13.6% in year to October 2022.

The total value of building work consented, excluding land, for the new dwellings consented in the 12 months to October this year was $$15.32 billion. That was down 11.7% compared to the year to October 2023, and down 24.8% compared to the year to October 2022.

The interactive charts below shows the trends in the number of new dwellings consented by region each month, and in the number of dwellings consented by type.

The comment stream on this article is now closed.

Building consents - residential

Select chart tabs

Source: Statistics NZ

Building consents - type

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.

37 Comments

by IT GUY | 2nd Dec 24, 11:44am 1733093042

ouch that's a lot of delayed projects then

by Advisor | 2nd Dec 24, 12:01pm 1733094098

The construction "boom" was largely fuelled by poorly designed townhouses and apartments being consented, built and sold in the worst parts of every city in the country. The market has come back to its senses ever since, hence the drop in consent numbers.

by CN - new | 2nd Dec 24, 12:17pm 1733095062

"The construction "boom" was largely fuelled by poorly designed townhouses and apartments being consented, built and sold in the worst parts of every city in the country"

Were developers simply supplying to meet the demand by highly leveraged non owner occupier buyers?

by Averageman | 2nd Dec 24, 1:13pm 1733098388

Probably. "Specuboxes"

by K.W. | 2nd Dec 24, 1:31pm 1733099468

Absolutely. That was the outcome of the Labour interest deductibility policy that drove investors into the new build market, and thus drove developers to supply the cheapest, nastiest product that the investor market would bear. The result is a lot of poorly designed and constructed, and rapidly degrading future ghettos. If only the Labour govt had incentivised owner occupiers to build instead of investors (like Australia does), we could have had a big supply of lovely family homes that will last the next hundred years.

by The Man3 | 2nd Dec 24, 2:30pm 1733103042

KW, with respect that is totally incorrect in regards to investors being enticed to build apartments due to interest deductibility being a driving influence.

The fact of the matter is the council's want inner city intensification and building the apartments that the council approved was the only way they could build profitably.

The fact of the matter is that the interest paid on borrowed money is a legitimate expense and if developers could not claim it as an expense then prices would need to be hiked appreciably.

The money in ChCh is now from building on the back of sections if they are suitable

by K.W. | 2nd Dec 24, 3:12pm 1733105529

Builders build what they can sell. If demand was from owner occupiers the crap townhouses would never have been built, and the developers wouldnt all be flying private jets and driving maseratis.

If you look at Australia, they build more apartments than houses - but they are not the crap that NZ builds. They are designed for owner occupiers, and are fit for that purpose. The kind of apartments and townhouses built in NZ would be considered student accommodation in Australia. Just look at the rubbish WC are building on Manchester St - 100+ apartments and not a single one of them has a car park. Apartment buildings in Australia have basement carparking, pools, gyms, cinemas, gardens, marinas. They are spacious, 3 bedroom 2 bath apartments. They have full sized kitchens, and adequate storage. These are the kind of apartments that owners want to live in.

Its not about building apartments vs houses. Its about the low quality rubbish that tax policy incentivised to be built, because low quality rubbish was all that investors were prepared to pay for. Developers could have built 3 nice townhouses with garages and a backyard on a section (like they used to, before the tax rules changed), but they switched to building 6-7 tiny townhouses with no garage and hardly any outdoor space instead. Why? Because investors dont care about garages, backyards, storage, kitchens.

Meanwhile, everyone who wants to live in a nice new house has moved out to Rolleston or Rangiora. We are replacing family homes with housing for low income tenants in ghettos. Neighbourhoods are deteriorating. Crime is increasing.

by The Man3 | 2nd Dec 24, 3:23pm 1733106194

It is the council that decided that they did not need to provide garaging or car parking and not the developers.

They should all have to have a garage and a car park, but the blame is the council.

The problem is that the governments have allowed all this immigration and they are accepting of living in these small units.

Havent heard of any issues with the building products being used but yes a stand alone home is far nicer

by Pragmatist | 2nd Dec 24, 4:27pm 1733110043

Nothing stopped the developers from building carparks and garages anyway, that was their own greed.

by Zwifter | 2nd Dec 24, 4:36pm 1733110575

Ultimately people shouldn't buy them and then they will not get built in the first place. Sure they could be much nicer, they would then be way more expensive. They should never be allowed to be built without parking however, this starts to inconvenience others. The problems are widespread there are even subdivisions where the roads are too narrow and there is no street parking either.

by Pragmatist | 2nd Dec 24, 8:26pm 1733124418

People who want a car shouldn't buy them, they're fine for non drivers.

by LapisLazuli5297 | 3rd Dec 24, 9:56am 1733172966

Glad they didn't build these in cities like Auckland then, where it is often impossible to get to and from a supermarket without a car.

by agnostium | 2nd Dec 24, 7:11pm 1733119884

It is the council that decided that they did not need to provide garaging or car parking and not the developers.

100% misleading. The Council stopped forcing developers to overprovide parking and left it to the developers and the free market to decide how much parking to provide. The market determined it didn't want parking. Council had nothing to do with it.

by LapisLazuli5297 | 3rd Dec 24, 10:00am 1733173258

The market determined

Wait until you hear about how the market determined that it was fine to build new developments on flood plains and liquifaction zones.

by 26@Main | 2nd Dec 24, 4:37pm 1733110663

Be careful about praising Australian apartment builds .... "the issue of leaks in apartment buildings and townhouses has become so common, experts fear a domestic building crisis is looming in Victoria due to a lack of regulation in the waterproofing industry".

https://www.abc.net.au/news/2023-03-18/leaky-buildings-poor-waterproofing-practices-experts-fear-crisis/102089312

From the Age in May this year .... "up to 60% of new apartments in Australia are riddled with construction flaws like cracked foundations, water leaks, balcony defects and flammable cladding".

by Pa1nter | 2nd Dec 24, 6:39pm 1733117980

If demand was from owner occupiers the crap townhouses would never have been built

Why would owner occupiers who need a subsidy be able to afford something significantly better?

by Mscnz | 2nd Dec 24, 9:20pm 1733127627

Yep the like of Williams crook, crooksfield and wolfcrook have been building absolute crap. Sad to see renting families crammed into those shoeboxes. Theyre slowly destroying Christchurch. Thankfully these aren't selling like they did in the frenzy so the crooks aren't gobbling up every single house section they can find anymore

by 26@Main | 2nd Dec 24, 2:38pm 1733103502

How does Australia incentivise owner occupiers to build?

by K.W. | 2nd Dec 24, 2:57pm 1733104634

First home owner grants for new homes ($30k in Queensland)

Regional home building boost grants

Home Builder grants

https://qro.qld.gov.au/property-concessions-grants/homebuilder-grant/

by CN - new | 2nd Dec 24, 3:34pm 1733106873

Doesn't that policy also increase house prices as builders raise their prices by the amount of the grant?

HomeBuilder and first home buyer grants made housing less affordable says Reserve Bank - ABC News

Government subsidies such as first home buyer grants and HomeBuilder have boosted demand for homes and helped push up house prices, with "pervasive" impacts on housing outcomes for some Australians, according to the Reserve Bank.

If household's aren't experiencing increases in household income of $30,000, doesn't this make house prices less affordable?

by 26@Main | 2nd Dec 24, 3:53pm 1733108004

Not entirely correct, from your link the Home Builder grants are no longer offered, and the Regional Home Building Boost grant was only available until 31 March 2021. The FHB grant is still available.

NZ did offer help to FHBs but the Coalition recently scrapped it, apparently re-directing the money to building social housing.

by sammnz | 2nd Dec 24, 5:59pm 1733115599

That just effectively removes stamp duty, the comparison's not the same as here

by K.W. | 2nd Dec 24, 6:27pm 1733117229

Stamp duty on new builds is usually waived, or only levied on the land value.

https://www.gjgardner.com.au/learn/cost-to-build/stamp-duty-on-new-home…

by HouseMouse | 2nd Dec 24, 11:59am 1733093998

‘That means fewer new residential projects getting started’

Yes probably, all things equal.

But very dependent on interest rates. For example, if the OCR was cut to 2% by Spring 2025 (relatively unlikely but certainly possible), we could well see more new residential projects getting started.

The fast track legislation is another important factor. For example, if two or three large projects such as Winton’s ‘Sunfield’ get approved, we could see quite an uptick in dwelling starts in late 2025/early 2026

by CN - new | 2nd Dec 24, 12:36pm 1733096174

"if the OCR was cut to 2% by Spring 2025 (relatively unlikely but certainly possible), we could well see more new residential projects getting started."

Recently released Watercare redzones in Auckland are likely to see highly leveraged landbankers / developers sell. Some will sell at a loss as the land price has now fallen since their purchase.

by Frank. | 2nd Dec 24, 12:42pm 1733096537

Winton’s Sunfield. A carless, solar powered “community” wedged between Takanini and Papakura. Sounds awesome. Kura Hard!

by Pragmatist | 2nd Dec 24, 1:09pm 1733098171

Of all the places to try a carless development... Why there?

by Eschaton | 2nd Dec 24, 1:22pm 1733098968

Ideology.

The band Creed once had a song... My own prison.

by HouseMouse | 2nd Dec 24, 3:28pm 1733106489

Except it’s not ‘carless’. Nonetheless, a valid point

by Mr Ed | 2nd Dec 24, 1:27pm 1733099241

supply doesn't create demand.

Jeez...another uninformed I reckon squeak

by Pragmatist | 2nd Dec 24, 5:54pm 1733115290

Except where it does, which according to some include

Cheap debt

Cycleways and roads. "Build it and they shall come"

Influencers.

I'm sure a few others will get surfaced

by HouseMouse | 2nd Dec 24, 3:35pm 1733106911

Where did I say ‘supply creates demand’?

That’s right, I didn’t say that (although sometimes it can)

But demand WILL be stimulated by significantly lower interest rates, all things equal. Or don’t you agree with that fairly basic economic principle?

And having a little bit of vague background on Sunfield, the housing is likely to be realised at pretty affordable price points, that will assist in fuelling demand.

But I am always open to contrary views ( if you have anything beyond the horseshit - haha - you always dish out)

by nktokyo | 2nd Dec 24, 1:03pm 1733097823

Interest being paid on new builds the same or higher even though volumes through the floor.

by The Man3 | 2nd Dec 24, 1:32pm 1733099527

The numbers will actually drop mire in the apartment build as it just js not financially viable to build anything to rent out!

Those that think that building more homes is going to drop the prices are going to be sadly disappointed.

The prices for existing homes is going to rise without doubt.

by Zwifter | 2nd Dec 24, 2:07pm 1733101623

Is anyone really surprised ? This thrown in and another 50bps cut in February and anyone can see where this if going.

by Retired-Poppy | 2nd Dec 24, 3:11pm 1733105501

Developer loses $190K here

“They are experienced developers so they know the market and they knew that they could not get that price in today’s market.”

As an experienced developer he obviously doubted he could recoup his loss anytime soon. Despite falling interest rates, debt is still too expensive.

by ChrisOfNoFame | 3rd Dec 24, 8:48am 1733168890

Lodging another BC for an extension before Christmas. Will start work immediately it is granted. Just two projects on the go - with all else on hold.