Statistics NZ figures show a reasonable upturn in the number of new homes consented in the third quarter of this year and an even stronger increase in building costs.
The latest Statistics NZ data show new dwelling consents for all of Aotearoa peaked at 13,251 in the third quarter of 2021 and then declined in each of the following three quarters.
But consents then perked up to 13,247 in the third quarter of this year, meaning the number of new homes consented in the three months ended September this year was almost unchanged from last year's peak.
However there was no such volatility in the estimated build costs for new dwellings, which have continued to rise steadily.
Building consent analysis by interest.co.nz shows the average estimated build cost, excluding the cost of land, for all new dwelling consents has now risen for seven consecutive quarters.
In the third quarter of this year the average estimated build cost, across all regions and dwelling types, was $2892 per square metre, up 16.1% compared to the third quarter of last year.
The smallest annual increase in estimated build costs was for townhouses and home units which were up 11.3% for the year to September, followed by retirement village units +13%, stand-alone houses +16.8% and apartments +20.6%.
Double digit annual increases in estimated build costs were recorded in all of the main urban districts of Auckland +16.8% (across all dwelling types), Waikato +20.4%, Bay of Plenty +19.4%, Wellington +11.0%, Canterbury +13.5% and Otago +12.9%.
However the actual inflation figures may be even higher than those numbers suggest, because those figures are based on estimates of costs provided by builders/developers at the time they lodged their applications for building consents and probably do not reflect cost increases for things such as materials and labour they may have faced subsequent to a consent being issued.
Interest.co.nz's Building Consent Analysis Tables provide a breakdown of new dwelling consents by average floor area, average value and average value per square metre, for all major dwelling types, nationally and in each major urban district. These are available here and are updated quarterly.
The table below is a summary showing the number of new dwelling consents issued each quarter and their average cost per square metre by housing type and major urban district.
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11 Comments
Look at the swing to Apartments/Townhouses/Retirement villages though!
Talking to a few people in the industry, they are all saying the same thing. Too expensive to build stand alone now, especially with higher interest rates. Hence the swing away from them.
Guess what though, we are just about to break ground on one, but are in a better position than most financially, (already own the land and have 30% deposit for the build) so are probably in OK shape. Anyone doing it with bare minimum equity I think will be in the brown stuff.
Two new houses currently under construction in our street. Neighbors are not going to be happy on either of them, huge poles going into the ground when its generally single level with a concrete base round here. Two others recently sold just one outstanding in the street, nice place to, wouldn't bother to build. Building costs down here up almost 20% and people think house prices are going to get way cheaper......yeah right.
Carlos house prices are falling $5000 a week in some areas around Auckland, are you saying they are not falling where you are.
Auckland usually leads the country in house price falls. Their population is also doing the reverse of a lot of the rest of the country.
It's a bit y shaped, entry level seems to have pulled back but higher end properties are going for crazy money.
Costs to build are bananas but I also don't see them reversing anytime soon. There's a lot of material price increases scheduled for January.
Yep buy the dip, costs are still rising.
In cities the land accounts for 75% of the price, building costs increases are marginal in comparison. It's the same story all around the world, the official talk is land to build is limited... NZ has a population density of around 1/12 of Europe, and cities over here can actually expand. Several new suburbs in Hamilton were only swamps 7 years ago (northern Flagstaff, eastern Chartwell, etc.).
The average value per sqm rate on these look low. Is that because councils don't actually require people to put the real authenticated build cost in? Many people won't have got a quote before submitting their consent, so it may just be a guess. As people pay less in fees for a cheaper build, I suspect may underestimate the build cost by a lot.
Absolutely, it’s cheaper to get the consent if you understate the building costs. Build costs for a large but very basic apartment building we are involved with is around 5k / m2.
Yikes , no wonder completed prices are so high.
A single dwelling build near me that some would probably consider "upper-middle" was submitted at $1,700/sqm. I guess my local council doesn't question such absurdity.
I wonder if there are any reputable organisations that publish average cost/M2 of completed builds across NZ? Makes it difficult when doing your own rough calculations for any proposed new build or extensions etc. Seems a big secret to me. But maybe the data is not collected for some reason.
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