New dwelling consents down a third last year compared to 2022 peak

Property / news

Value of building work for new housing dropped almost $5 billion last year versus 2022 peak

4th Feb 25, 2:03pm by Greg Ninness

Construction of new homes may be down by about a third this year compared to the peak in 2020/21 as residential building consent numbers decline.

According to Statistics NZ, consents were issued for 33,660 new dwellings in 2024. That's down from 37,239 in 2023, 49,538 in 2022 and 49,007 in 2021.

That means the number of new dwellings consented last year was down 32% compared to the recent peak of 2022.

Stand alone house were the most popular type of dwelling, with 15,780 consented last year. That's down 21,400 in 2022 (-26%).

They were closely followed by 14,141 townhouses and home units, down from 20,793 in 2022 (-32%), 1981 apartments, down from 4388 (-55%) in 2022, and 1698 retirement village units, down from 2957 (-43%) in 2022.

The total estimated value of building work consented for new dwellings, excluding land, last year was $15.36 billion, down from 16.46 billion in in 2023 and $20.23 billion in 2022. That represents a decline of $4.9 billion, or 24% over the last two years.

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Building consents - residential

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Source: Statistics NZ

Building consents - type

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Source: Statistics NZ

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14 Comments

by HouseMouse | 4th Feb 25, 2:11pm 1738631475

Auckland very weak, but Wellington and Waikato really smashed

by RookieInvestor | 4th Feb 25, 2:22pm 1738632175

Link?

by morepork | 4th Feb 25, 2:37pm 1738633059

https://www.stats.govt.nz/information-releases/building-consents-issued…

by HouseMouse | 4th Feb 25, 2:51pm 1738633899

Yes. Wellington down about 50% from peak. Waikato nearly 45%

anyone on the ground in those places have any thoughts? I mostly work on projects in Auckland

some mediocre economist said yesterday that he thinks the slump has bottomed out. I am not so sure, although we could be getting close

by HouseMouse | 4th Feb 25, 2:53pm 1738634007

And before any spruikers turn this into a ‘good news story’ for house prices - there’s a lot of new build inventory on the market, and still a fair bit to come

by RookieInvestor | 4th Feb 25, 2:56pm 1738634178

i would say largely due to the amount of KO houses in those areas.

by HouseMouse | 4th Feb 25, 2:59pm 1738634365

Only a minor influence. At peak, KO consents were typically 5-7% of total consents

The biggest reason in Wellington is the drop in property values, which have been about the largest in the country. Large scale redundancies probably haven’t helped

by Getting it right. | 4th Feb 25, 3:56pm 1738637802

Too many town houses being built which the market doesn't want at current asking prices. It might be ok for affordability and not pushing house prices even higher if they yielded 6+% gross on asking, but they tend to yield just 3-4%.

Every townhouse development is actually pushing up house prices by removing existing (generally more affordable larger homes) and replacing them with tiny expensive ones. It's also pushing up rents for actual family houses even though rents for small townhouses may be stable because of the extra supply.

If an existing house is demolished for every 5 townhouses built, then we had only a net 12k stand alone houses built in a year, further exacerbating the growth in unaffordability.

The current situation is utter madness.

Rebuilding the country with suburban shoeboxes is bad all round.

by problem-9 | 4th Feb 25, 6:06pm 1738645569

Every townhouse development is actually pushing up house prices by removing existing (generally more affordable larger homes) and replacing them with tiny expensive ones. It's also pushing up rents for actual family houses even though rents for small townhouses may be stable because of the extra supply.

If an existing house is demolished for every 5 townhouses built, then we had only a net 12k stand alone houses built in a year, further exacerbating the growth in unaffordability.

That seems wildly implausable to me considering townhouses and standalone houses are pretty close substitutes, any actual evidence to support this? Looks to me that the prices match each other quite closely over time, rather than diverging massively in reponse to the boom in townhouse construction over the last few years.

by Getting it right. | 4th Feb 25, 10:31pm 1738661510

problem-9 - you are quoting "research" from a firm that profits from marketing and selling townhouses!! The epitome of bias!

Demolish a 4 bed older house on 600m2 worth $600k and renting for $500pw. Replace with 5 tiny 2 beds each selling at $600k each and renting at $500pw. That's the scenario.

Affordable 4 bed no longer exists. Expensive 2 beds now flood market. Up goes rents. Up goes house prices. Simple facts. Not at all implausible.

Had the house been subdivided and one or two units built behind instead, affordability would improve but that's not happening.

Demolition and replacement with expensive crappy units is pushing up the cost of everything and creating house and rental inflation.

by problem-9 | 5th Feb 25, 9:39am 1738701576

Infortunately I didn't find it easy to find price data - agree a more neutral source would be better. But you haven't responded with any data to back up what you are saying, just stating what you reckon.

Demolish a 4 bed older house on 600m2 worth $600k and renting for $500pw. Replace with 5 tiny 2 beds each selling at $600k each and renting at $500pw

If the market price for the 4 bedroom and the 2 bedroom are identical, then this example seems totally counter to your argument

by Getting it right. | 4th Feb 25, 11:01pm 1738663278

problem 9 - not sure how you think a stand alone house on a freehold section and the 2020s definition of a "townhouse" are close substitutes. They attract completely different buyers and renters and although a stand alone house buyer may be happy to live temporarily in a "townhouse" it won't generally won't to be a long term solution.

In fact townhouses don't follow the general market prices at all. What actually happens is that initially (when new) townhouses have a higher value (due to their newness) but they fall in value over time. So the sales prices for townhouses and units are always skewed because new units always sell more often when they are brand spanking new, and much less often when they are older so the whole comparison between the prices of existing homes on full sections and new units is flawed.

Some real evidence: review the resale prices of Williams Corporation units built in 2018-2020. Most of the 1 bedroom units which initially sold in Christchurch at $375-425k are now reselling at either break even (or losses when fees are considered) or at very best less than a 10% gain.

The general market for stand alone homes in the same areas has pretty much doubled since 2018 ie plus 100%.

So constantly building more units that aren't really wanted has actually only driven house prices even higher. Those units being built, although they increase supply, don't lower prices because they are expensive for what they are and a large component of that expensive price tag is a big profit for the developer and tax and levies for the government and councils.

"Townhouse" buyers are likely to see flat to falling values for the first decade of ownership (particularly if building defects show up) unless the unit is a truly desirable "home" type of property.

by problem-9 | 5th Feb 25, 10:43am 1738705383

Of course they are close substitutes, just not exact substitutes. There's a massive spectrum of house and land combos that people choose from given their preferences with a given budget - lifestyle block, quarter acre section, subdivided section, duplex/semi-detached, connected townhomes/rowhouses, apartments - each of these can also be more or fewer bedrooms and be in more or less desirable locations etc.

Few individuals are directly deciding between a 4 bed house on a large section and a 2 bedroom townhouse with no yard, but each person in the 2 bedroom townhouse isn't buying a semidetached with a garden, leaving it for another person who doesn't buy a small section standalone house, and finally freeing up supply of the 4 bed house.

I agree it's not quite as simple as that. Upzoning can increase the price of land because of the greater development potential (though this doesn't effect rents) and there is likely some impact on the margin that reduction in standalone house supply increases the price of those remaining. But as long as the two bedroom townhouse is occupied, people living there are taken off the market for other houses. My strong expectation is that this impact dominates, though it is good to keep in mind that the best way to ensure affordability is to allow both intensification and further construction on city outskirts.

If you have actual data/analysis and not just your impressions of individual property prices then bring it up. Academic studies seem to conclude that upzoning significantly reduce rents, and not just for 1-2 bedroom units.

by MikeM | 5th Feb 25, 9:34am 1738701272

Wait til this year's numbers come out. Ain't seen nothing yet.