Although there was a jump in the number of new homes consented in May compared to April, numbers remain well down from where they were a year ago.
According to Statistics NZ, 3725 new dwellings were consented in May this year, up 35% compared to April.
However April's consent numbers were unusually low, and May's consent numbers were down 17.7% compared to May last year.
In the 12 months to the end of May 2023, 45,159 new dwellings were consented, down 11.5% (-5856) compared to the previous 12 months.
Multi-unit properties such as townhouses and home units remain the most popular type of new dwelling, with 19,032 consented in the 12 months to May 2023. They're followed by 18,734 stand alone houses, 4164 apartments and 3229 retirement village units.
The total value of new dwelling work consented is also on the slide, declining by $932 million (-4.7%) in the year to May, from $19.997 billion in the 12 months to May 2022 to $19.065 billion in the 12 months to May 2023.
However the decline has been made up for by non-residential building consents, which remain relatively robust.
In the 12 months to May this year $9.867 billion of non-residential building work was consented, up from $8.94 billion (+10.4%) compared to the previous 12 months.
That meant the total value of all building work consented (residential and non-residential) in the year to May 2023 was almost unchanged at $31.449 billion, compared to $31.409 billion in the year to May 2022.
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11 Comments
That's a good couple of billion in building activity less.
Now adjust for building cost inflation, and figure out what that means for employment levels in the industry.
I'm not in the know re construction fallout following GFC, but the exodus of builders 2 - 4 years following the major downturn, was that related? I imagine our net migration stats wouldn't give us telling info for another 12 to 16 months. By then we could be deep in the red.
Compared with the year ended May 2022, the changes in May 2023 were:
- Townhouses, flats, and units were down 3.2 percent at 19,032
- Standalone houses down 24 percent at 18,734
- Apartments up 3.1 percent at 4,164
- Retirement units up 16 percent at 3,229
Good thing denser housing is still in vogue and standalone developments are taking a hit.
Standalone houses are what your typical builder builds.
Unless it gets cheaper to build it is going to hurt!
I have it on good authority that there's no way it can get cheaper to build. There are a swathe of cost externalities that are not driven by interest rates setting a solid price floor on what it costs to build new.
Everything, from council fees to builders, GIB, framing timber, land etc everything that goes into a house is just more expensive for cost's sake. Nobody has increased their profit margin off the back of 10 years of increased borrowing power. You'd still be talking $1m to build a basic new house, even if interest rates stayed at 8% since the GFC. /sarc.
Mmm, retirement unit and shoebox apartments. Kwality living everyone!
Yeah, Aotearoa looking more and more like a ghetto
I note the CEO of Universal Homes on linkedin today saying these figures were inflated as many people applied for consent before "draconian H1 changes came into effect in May".
He is predicting "the data pre-election will show a consent drop like never before".
Yowch! That's gonna hurt.
One wonders how many of those consents will actually start in the next 12 months ...
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