There was a sharp drop in the number of new homes consented in October.
According to Statistics NZ, 3568 new dwellings were consented in October. That's down from 4600 (-22.4%) in September, and 4048 (-11.9%) in October last year.
October's residential consent numbers were the lowest they've been this year, apart from January which is usually a quiet month because of the the holiday break.
However there were significant regional variations in the figures, with the number of homes being consented in Auckland, Waikato and Canterbury remaining at or near their recent highs, while consents in Wellington and the rest of the country are showing a steady decline.
The decline in consents doesn't just signal an overall drop in the supply of new homes for the month, it also means a drop in economic activity from the construction industry.
The total value of new dwelling consents issued in October was $1.469 billion, down 21.3% compared to September and down 5.5% compared to October last year.
But while a decline in residential construction has been anticipated for some time due to rising interest rates and a slumping residential property market, it's too soon to say whether October's figures are the start of a trend. That's because the biggest decline in October was in the number of apartments consented, and because of the scale of these projects, apartment consent numbers can be volatile from month to month and September's apartment consents were particularly high.
The chart below shows the monthly trend in consent numbers by dwelling type.
A quarterly analysis of residential consents by dwelling type, size and build cost, in the main urban areas, is available on our Residential Building Consent Analysis page.
A similar analysis for consents of commercial premises is available on our Commercial Building Consent Analysis page.
Building consents - type
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6 Comments
You would not have to care about profit to start a development project now. That said some dont, as they are building to occupy vs speculate.
Hopefully access to builders will become easier and cheaper as a result.
Once you start a development esp a grand design you can't stop even if the cost dramatically escalates. Think thrice beforehand.
A relatives marriage fell apart when they were mid-stage of their dream home. Pretty ugly, but luckily for them the market was strong. Selling a half completed job in a buyers market won't be easy
The inevitable re-balancing of the building industry is upon us. If you are a tradie who operated in a professional and financially sensible manner, times may well get tough but you will adapt and survive.
If however you are one of those tradies who continually chased the dollar, dropping clients who had smaller, lower paying jobs or blackmailed them into paying 3 times the going rate because you knew they were desperate, your days are numbered.
With the current policies and environment, In few years we will be country where 80% of population lives and jobs are in the golden triangle region of Auckland, Waikato and Tauranga.
The rest of country will be dull and under utilized.
Just my point of view on how i see things happening in the county.
Welly is only populated due to tax payer money being spent there by government and artificial creation of jobs. I think the number of bureaucracts and tax payer funded jobs in NZ are far higher than any other OECD country. Anyone has data on this?
The research data on public sector efficiency suggests quite the opposite.
The country ranks second in the world for Civil Service Effectiveness (2019, Blavatnick School of Government/Oxford University), and eighth out of 193 countries in the E-Government Development Index (2020, United Nations).
The only good scores NZ received in IMD's 2022 World Competitiveness Ranking (#31 overall vs #20 in 2021) was our government efficiency, ranking #17 in business legislation and #22 in business framework. We were rated terribly on overall business efficiency, trade, international investment and technological infrastructure.
I guess Luxon is right when he says that our businesses have gone soft. We have strong public institutions and a decent business landscape; evidently our private sector is underperforming and dragging our global competitiveness down.
I don't see Christchurch, well, greater Christchurch including satellite towns in Selwyn/Waimakariri going away, but I also don't see it changing much from the 10% of the country that currently lives there.
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