The number of new homes being built continues its steady decline, with the number of new dwelling consents issued in the 12 months to the end of January down 26.3% compared to the previous 12 months.
According to Statistics NZ, building consents were issued for 36,453 new dwellings in the 12 months to the end of January, down 13,027 from the 49,480 consents issued in the 12 months to January 2023.
That puts the latest annual consent figures at their lowest level in five years. In the January 2019 year new dwelling consents were 33,576. The January 2024 year fall is the first January year fall since 2012.
The biggest decline in percentage terms was for apartments -50.2%, followed by retirement village units -36.6%, stand alone houses -26.3% and townhouses/home units -19.6%.
The total value of new dwellings consented over the year to January (excluding the value of the land) was $16.168 billion, down $4.09 billion (-20.2%).
Around the country there was only one region where consents were up, Gisborne. There, 177 new dwellings were consented in the year to January, up 8.6% compared to the previous 12 months.
The biggest decline was in Tasman District where new dwelling consents were down 45.8% compared to the previous 12 months.
Around the main urban areas, new dwelling consents in Auckland were down 27.7%, Waikato -26.8%, Bay of Plenty -17.9%, Wellington Region -40.6%, Canterbury -23.8% and Otago -19.4%.
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28 Comments
Construction is dead. Its going to need a lot to be revived in a market where prices are likely to stay high.
Dying. Not dead. Dead indicates it can't get any worse.
Just had some renovations done and got charge $75/hr for apprentices, let alone the main guys.
$/sqm rates are so high 95% of projects are uneconomic. Dosn't matter where or what sector. Everything is grinding to a halt.
$7,000/sqm is replacing the old $4,500/sqm. Something has to give.
Land prices dropped first.
Trade labour prices dropping.
Materials not quite dropping yet. Some are but others aren't.
Consultants are still putting rates up and that has to give.
Council are in their own world.
Infrastructure needs money.
GST keeps on keeping on.
$7,000/sqm may be last year's number. It's certainly less now.
Pipeline is drying up because developers are still sitting on stock that has not been sold for 18 months - suprise suprise.
More house price falls in the coming 12 months and dropping consents will mean less completed dwellings a couple of years down the line which will then again spur prices upwards but from a lower base than today.
Yip we will have low prices, dropping rates, less houses than demand, lots of employment and growing wages, increased immigration and not enuf builders to catch up. Fomo at the auctions.
Deja vu.
Probably correct except we have about 2 years of serious pain to get through first and prices will drop, the only question is how much.
New builds won't drop where a developer can rent it out. Why sell for less than the cost to build unless it is a forced sale.
Yeah they will. The cost of debt is higher than rental income.
Supply crashing, population soaring, rates coming down.
Prepare for many years of house price increases 🥂
Number of homes for sale at highest levels I've seen in recent history and still increasing.
Population of unskilled immigrants who can barely afford to rent soaring.
Rates not coming down until Apr 2025 bar a black swan type event.
Where are you getting your hopium? The stuff is clearly STRONG.
Don't disagree with your main thrust but rates will fall this year. The real economy is starting to look incredibly soft.
Don't disagree with the possibility that rates could go down this year but that will require the economy to really suffer heavily in the coming 6 months - i.e. massive job losses
If the above happens it will soften the housing market considerably. Once people start losing jobs and having no hope in hell to pay their mortgage payments, stock will increase considerably while FHBs, who are also losing jobs, decide not to enter. The numbers for investors don't work at all at this stage so they won't enter until prices adjust and deductability is fully back.
The worst part is even if we have a drop in say, November 2024, we won't really get proper relief until perhaps a year after as people refix at the new rates.
Either way, there is a minimum of about 2 years of pain ahead of us.
Sounds about right.
And then the party will start again in about 2 years, when interest rates are much lower again. Although I suspect the next party will be a bit more subdued
rates could go down this year but that will require the economy to really suffer heavily in the coming 6 months - i.e. massive job losses
And the RBG has even said he'll need to see unemployment rise before cutting.
It's a weird world for sure.
What did Ireland find about migrant population when they had a crash?
I seem to recall they had a bunch of people leave for a fair while. People who lose jobs or decide that a speculative market has made the country too unpleasant to deal with naff off overseas, when they can.
Central bankers love to talk about 'output gaps' and 'capacity' when they refer to inflation. I.e. too much money chasing too few goods. Like, I dunno, houses perhaps?
Can someone at the RBNZ explain to us why they believe driving the building industry into bust mode helps with increasing output and increasing capacity? And how - in particular - how it helps with house price inflation when the supply of new dwellings just dries up?
(Oh yeah. Just another unintended outcome of that awful tool they use but think is so grand.)
If the government is encouraging opening up land for development this will lower land prices across New Zealand which will make property prices fall much quicker I expect another 20% down over next 18 months and if the crap really it’s the fan much larger price falls will occur.
20% up in the next 18-24mnths more like it
Exactly - land opening up will take 5-10 years. In that time, prices of existing stock will have doubled.
there is no quick answer to this;
- development takes time
- consents take time
- infrastructure takes time
- processing titles take time
- land sales take time
- housing build takes time
- compliance certs take time
John Key quit the ANZ this week, next day went on TV saying house prices will at least double in the next 10yrs.
The Rule of 72 says doubling in 10 years is 7.2% increases p.a.
Watching current auction results and the calculating p.a. increases from the last purchase price and most houses are selling for around 3% to 5% p.a. increases. (Not a few at 1-2% and very few above 6%.)
That aside, methinks Prince John will be wrong on this one as he hasn't factored in supply increases due to intensification. Prince John lived through times when NIMBY councils, elected by the rentier class of grey rinse brigade and pearl clutchers, restricted building supply thus his perspective is warped by that. Younger people have wised up and local government voters will ensure such foolishness does not repeat.
.
Auckland and Wellington, ouch
Maybe you can now get a house, major house extension built in 4-6months instead of 12-18months a year or two ago. Builders now having to look at what's available to build rather than cocking a snook at projects a year to two years ago.
Certainly prefer this to having builders with the whip hand.
If you can afford the materials
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