Jan building consents down 17% from year ago; monthly trend still negative, Stats NZ figures show

Jan building consents down 17% from year ago; monthly trend still negative, Stats NZ figures show

The number of new dwelling consents authorised in January was down 17% from the same month a year ago, although seasonally adjusted figures show there was a 10% rebound from December, Statistics New Zealand said.

There were 867 consents for new dwellings during the month, down from 1,042 in January 2010. Of that, 90 were consents for apartment units (up from 42 in Jan 2010), while 777 were for other dwellings (down from 1,000).

Seasonally adjusted, there were 1,126 dwelling consents during the month, up from 1,027 in December. The trend in consents, which is based on seasonally adjusted numbers, remained negative in January and has been falling since May 2010. However the negative trend has been easing since August 2010.

Here is the release from Stats NZ:

In January 2011, the value of residential building consents fell 19 percent compared with January 2010, Statistics New Zealand said today. (Note that data in this release is for the month before the February 2011 Christchurch earthquake.) Although there was a small rise in non-residential consents (up 2.3 percent), the value of consents for all buildings fell 11 percent to $537 million.

“January commonly has a low value of consents issued when compared with other months, but at $537 million, the latest value for all buildings is the lowest for any month since February 2002,” business statistics manager, Louise Holmes-Oliver said.

In January 2011, consents were issued for 90 new apartment units and 777 other homes. This gives a total of 867 new homes authorised, down from January 2010, and the second lowest total in any month since the series began. The long-term trend indicates the number of new homes authorised has been in decline since early 2010 – and is down 23 percent since then.

Fewer new homes were authorised in 12 of New Zealand’s 16 regions in January 2011 compared with January 2010. Numbers fell 17 percent in both the North and South Islands.

In Canterbury, 30 consents related to the September 2010 earthquakes were identified in January 2011, including five new dwellings. The total value of these was $4.5 million.

Here is the reaction from ASB economist Chris Tennent-Brown

Canterbury Earthquake

Canterbury consents of 207 dwellings contrasting to 209 in October, and the monthly average of 247 units in the year prior to the earthquake (all figures seasonally adjusted).  30 earthquake-related consents were identified in the January figures, including 5 dwellings (figures unadjusted).

Prior to the February earthquake in Canterbury, reconstruction activity from the September earthquake was underpinning our construction outlook for 2011.  Earthquake-related consents (from the September quake) have not shown up to any significant degree in consents for the months from September to January.   

We had previously expected that building consents would be picking up over the coming months as new homes were consented. We had also expected that building activity in Christchurch would be starting to pick up in the early months of 2011.   The increased scale of destruction following the February quake now means repair work is unlikely to get underway in a meaningful sense until late this year.  


Outside of Canterbury, the current national level of consent issuance is broadly consistent with our weak residential construction forecasts for late 2010 and early 2011. However, we expect that residential building consent issuance will pick up gradually over the year.  Furthermore, if consent issuance remains at the current low level for too long, there is a significant risk of a housing shortage in areas where the population is growing and more homes will be required in the years ahead.   

For the RBNZ, the immediate concern is the impact of the Canterbury earthquake on an economy which was already frustratingly weak.  We expect the RBNZ to deliver a 50 basis point rate cut at the March 10 announcement.

And from JP Morgagn economist Helan Kevans:

The building permits data in New Zealand fell much in line with expectations. Permits rebounded in January, rising 9.6%m/m (J.P. Morgan: +8.5%; no consensus), following an 18.2% drop in the previous month. The result marked the biggest increase in two years, and follows other stronger data over the last week, including the terms of trade reaching a 35-year high, the trade balance moving into surplus for the first time since mid-2010, and a significant rise in Fonterra’s forecast payout to dairy farmers.

The underlying story in the permits data was weaker than the headline suggested, however. In value terms, permits hit an 18-year low and, while January is typically a low month for consents, this year was the lowest since February 2002. Further, the trend in the number of new permits issued now has declined 23% since April 2010. Only 867 homes were authorized in January, marking the second lowest total on record.

Non-residential permits also remained weak, rising a mere 2.3%m/m in value terms, and falling 3.9% based on floor space. These permits have stepped down a notch after reaching an 18-month high in November. It was then that approvals for education buildings, factories and industrial buildings spiked higher, which we believed owed to firms and government bodies pushing through rebuilding projects faster than individual households in the wake of the September earthquake. This was short-lived, however, with only 30 permits identified in December and January as relating to the 2010 earthquake in Canterbury.

We suspect that, following the most recent earthquake in Christchurch in February, earthquake effects likely will take some time to filter through to a rise in permits. We expect permits will slump in February, and possibly again in March, before picking up significantly later in the year.

(Updates with economist comments)

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This is the best possibe news for property owners and investors.

The seeds have been sown for a massive shortage of affordable housing coupled with an equally massive shortage of rentals.

Within the next  year or two  we will see marches, protests and pressure groups fighting for "tenants rights", over crowding, reports of slum landlords, and the inevitable rise in rents and prices especially in the main centres.

Welcome to capitalism.

Yes we will, but it won't be for the reasons scumbag property investors believe. (as previously stated those leeches chasing capital gains?

It will happen because of those through greed or ignorance have large mortgages that were stupid enough to believe that capital gains go on for ever.

When interest rates go through the roof and then later on hyper inflation kicks in then all those houses reclaimed by the banks because of unpaid mortgages will be locked up and thus withdrawn from the rental market.

Despite rapidly descending house prices there will be a shortage of rentals. At the same time 30% unemployment will mean rents are unaffordable causing multiple families to share houses.

You think I jest, think again as there is a precedent for it.

All caused by those clowns that didn't consider the ramifications of fractional reserve banking.

Do learn a trade, be productive, innovative - rather then poor BigDaddy - “sharking” around.

@ ctnz

A number of articles and posts over the last 6 months have made disparaging references to council costs and building consent costs. As I'm contemplating re-locating back to nz in the near future with an idea of building a house in a rural area somewhere north of Auckland, now getting a bit concerned how much these costs are going to be so I can factor them in to the final decision. How much are these costs? What would the costs be for say a $300k build? Just how much are we talking about in "total on-costs"? What were the consent on-costs for your $180k extension?

ctnz, thx, $25k+, yikes

Thx, I'm thinking of a 1 hectare block and a Lockwood Home. Any downside you know of with Lockwood?

Hmmm, the cost. Out of 8 building companies we went to see they were among the 3 that we were happy to build with but the price / sqm was too high (around $2K/sqm).

Come down to the Manawatu! I will build you our 220m2 house, 4 bed, int. access garage, 2 x bathroom, brick & Longrun roof - on concrete slab for $230,000 inc. gst. Thats $1045.45m2! Comes complete with heat pump (ducted to 4 positions). Excludes floor covering, land or any site work (drive,path etc)  The building consent fees $4,300 inc. gst included. Drawing fees included.  FIXED PRICE.

For us it came to $1250/m2, which is pretty good considering all the "features" (slab insulation, wetback logburner, solar etc & top floor on part of the house). That's including floor coverings (not an insignificant cost). 

Personnally I wouldn't want bricks anywhere near me after going through 6 months of shakes but that's just me. From that point of view, the "traditional" kiwi house with timber floors, structure and cladding is probably the smartest way to build in this country.

Thats reasonably competitive with our costing, taking into account the additional items you describe. And I am inclined to agree with the comment about bricks etc - but the Kiwi buyer wants brick,so thats what we give them! 

I second the comment about Hebel. That's the cladding we chose and no regrets so far. Our house is located about 20kms from the epicentre of the Sept 7.1 earthquake that caused a significant amount of intense shaking and we did not get a single crack in the cladding.

You must have good expansion gaps in the Hebel. At White Shadows, Mike and Bill weren't so lucky!

"...repairing damaged Hebel block." - (story three)


Hebel also has had its problems. And I know of no problem with Linea where it has been correctly installed.

Could'nt get the calculater to work CTNZ.

$25,000 for a building consent is outrageous.

I recently worked for a major home building company in the Far North district and have to say we were paying more in line with Elley's example a bit more maybe $5,000 or so. Not sure what the hell's going on in Auckland.

The development contributions (parking, reserves, sewer etc) are (or should have been) paid by the section developer. You should not require a resource consent either - this again is done by the developer prior to subdivision - exception being if you are wanting to do something outside the provisions of your district plan say exceding the height limit or the impermiable surface area. It pays to check that all levies etc are paid up before you buy - the council can do this and at no charge, there are a few older titles around where this has not been done

Of course the developer will need to recover their costs but with the district groaning with unsold sections and bare blocks they will be struggling. We have ten years supply at current sales rates so might be good for the likes of iconclast.


ctnz, calculator worked fine for me

kiwidave, "groaning with unsold sections and bare blocks they will be struggling. We have ten years supply at current sales rates" ... ah .. good intel .. that helps .. thanks very much .. have tried emailing a couple of agents in the area between mahurangi and whangarei .. they're so busy they havent even bothered to reply

They must be on holiday because they are certainly not selling properties. 

We built in rural Canterbury in 2009/2010 and the building consent costs + about 13 inspections came to about 1% of the total cost of the build (ie, 3K for a 300K build). This is what the council had told us to plan for (the builders' PC sum was much lower). I'm not sure if costs are significantly different in Auckland though.

That was a section in a small 7 x lifestyle block (4ha) subdivision. Services were at the boundary and the subdivision costs were of course with the seller, not with us. So yes, the costs of getting services to the boundary would definitely have been part of the section cost. I'm only talking about the cost to us to get building consent + all the inspections after we had purchased the section.

I am not sure what the cost of the bare land with no services would have been but I don't think developers can get title without having provided all services to boundary so you wouldn't be able to buy such a (residential) section?

Due to the size a lifestyle block, getting the services from the boundary to the actual chosen building site on that land was quite costly (eg 8K for power + Telecom if I remember well) but that's not really a council cost. Similarly, we had to install a septic tank (about 11-12K). Of course, all this plus excavation (the cost of which depends a lot on the contour of the land), forming a driveway etc still need to be included in the overall budget for the build. In all, the extra "stuff" that we had to pay for (largely due to building in a rural location) came to about 35K excluding consent/inspection costs.

Elley - How are you getting on with cutting all that grass?

We have a nice neighbour who actually pays us to mow our lawn :) lol, he's a farmer (grazing) and needs the hay. Works well for both parties! Although I must say by the time it was tall enough to come make the hay before Christmas we could barely see more than our 18-month-old' hat above the grass... almost lost him a couple of times!

We're planning to put in a few paddocks & get a handful of cows + sheep at some point to do the mowing job but I have enough kids + work on my hands right now to not want to deal with stock just yet (so we are focusing on a big veggie garden, lots of fruit trees, a blueberry field, and firewood trees instead, and hubby wants hives and lots of manuka trees as well). I'm not a city girl to be honest - having to go shopping is a punishment - so I love all that space we have, and the views. Wouldn't trade back for our house on 750m2 in the eastern suburbs of Chch for anything in the world, even though it was really quite nice (but did I mention the neighbour had a view into our bathroom?!).

From th elast time I did it, work on 1% for the council.


"Lower house prices were slowing New Zealand’s economic recovery"

Personally an economic recovery should be indepenant of house prices.....if the only way an economy can "recover" is an increase in the house prices then to me we are screwed...

Surely lower house prices are good for the economy.  It should mean that people have more money to spend on other goods.  Am I missing something here?

the NZ economy is so pathetic that housing activity is its only hope

sad but true

Just had coffee with my mate who is a financial adviser .Talked a bit about auctions we had both been to in the last few weeks.

Between us, we had been to 5 auctions. He had been to a couple with 30-40 people in attendance, good properties.

All 5 auctions, no bids even offered. All passed in. 

Only anecdotal, take it for what its worth

Matt - From experience I can tell you that the majority of the other people at the auctions were RE Agents, that's why there were no bids.  This is what was happening in property auctions in ChCh prior to September.  I went to several auctions where I was the only bidder, apart from the vendor (what a joke) and because my bids were well under the reserve they were not accepted.  

makes sense Andy.

So the mexican standoff continues

I'm happy to keep my eyes open and go to the odd auction that interests me, but I refuse to pay the stupid prices many of these vendors are expecting

One of these days I might encounter a vendor who is a bit desperate to sell, and land a good deal

For some reason many of these vendors expect properties to sell for prices that only realise a 4 to 5% yield

thats just not going to happen



3 were Mt Eden / Epsom, 2 were in the CBD (apartments)

You lot have obviouly gone to the wrong auctions .

Multiple offers on any nice home under $450K in the Auckland market

Fierce bidding for this lot:

Published & updated 4 March 2011 Bob Dey Report
6 out of 9 units offered at Ray White City Apartments’ auction yesterday were sold under the hammer and another was sold prior. One apartment passed in yesterday was sold this morning.

Smaller investment stock remained in most demand, but there was strong interest in a larger Dilworth apartment above Customs St East, with a northerly aspect.

Auction results:
Learning Quarter
Tetra House, 85 Wakefield St, unit 614, one bedroom, sold prior for $141,000 (Thomas Sahs)
The Quadrant, 10 Waterloo Quadrant, unit 2102, 41m”, 2 bedrooms, parking space, in hotel pool managed by Melview, rent $370/week, parking space $290/month, sold for $268,500 including gst (Damian Piggin & Daniel Horrobin)
The Quadrant, 10 Waterloo Quadrant, unit 2002, 41m”, 2 bedrooms, parking space, in hotel pool managed by Melview, rent $470/week for unit + parking, passed in at $266,000 including gst, sold post-auction for $288,000 (Damian Piggin & Daniel Horrobin)
Queen St valley
Dilworth, 22 Queen St, unit 7B, 86m”, 2 bedrooms, vacant, sold for $345,000 (Daniel Horrobin & Damian Piggin)
The Federal, 18 Federal St, unit 3A, 50m”, furnished one bedroom, deck, passed in at $217,000 (Matt Shirley & Judi Yurak)
Victoria Quarter
Ascent, 149 Nelson St, unit 516, 56m”, furnished 2 bedrooms, parking space, rent $400/week fixed until August, sold for $226,000 (Matt Shirley & Judi Yurak)
Heritage, 35 Hobson St, unit 333, 30m” furnished studio facing south-west, rent $200/week, sold for $111,000 (Damian Piggin & Daniel Horrobin)
Zest, 72 Nelson St, unit 403, 37m”, 2 bedrooms, parking space, rent $320/week for the apartment, $55/week for the parking, sold for $173,500 (Matt Shirley & Judi Yurak)

Zest, 72 Nelson St, unit 931, 37m”, 2 bedrooms, furnished, rent $290/week, sold for $148,000 (Matt Shirley & Judi Yurak)

mostly shoebox garbage by the sounds of things

your comment "Multiple offers on any nice home under $450K in the Auckland market" does not apply to these 

pretty good yields mind you....but reliant on bargain basement prices which will be bringing the median Auckl price down!

And I wouldn't factor any capital gains on those places -

Yep he keeps spinning.

Baileys did an Auction before Xmas and it covered all of Auckland City. Only 2 of 20 or so sold and they were shoe boxes also.

Those chasing capital gains are leeches.

Really good thread. A pleasure to read. Lots of info.