The number of new homes being consented is at a five-year low and continuing to decline.
According to Statistics NZ, 33,632 new dwellings were consented in the 12 months to August this year, down from 42,110 (-20.1%) in the 12 months to August last year and down by a third compared to the 50,653 new dwellings consented in the year to August 2022.
That means 17,021 fewer new homes were consented in the year to August 2024 than the same period two years ago and consents in the year to August were at a five year low.
That creates a grim outlook for the residential construction sector, with the value of the building work consented for new dwellings over the year to August declining by $5 billion (-24.6%) over the last two years.
That is showing up in figures from credit bureau Centrix, which show that construction firms currently represent one out of four companies being placed into liquidation and 546 construction firms have been liquidated in the past 12 months.
The biggest decline in the types of dwellings consented was for apartments, which dropped from 3801 in the year to August 2023 to 1704 in the year to August 2024 (-55%).
In the month of August this year, just 47 new apartments were consented nationally.
The number of new retirement village units has also dropped away sharply, falling by 40.3% in the year to August, followed by townhouses and home units which were down -19.6% over the same period.
Compared to other types of dwellings, stand alone houses have held up comparatively well, declining by just 9.7% over the 12 months to August, although that followed a 25.1% decline in the previous 12 months.
Making things worse, the value of non-residential building work being consented is also declining, dropping from $9.9 billion in the year to August 2023, to $9.1 billion (-8%) in the year to August this year.
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The charts below show the monthly trends in residential consent issuance, by dwelling type and region.
Building consents - type
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Building consents - residential
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22 Comments
Early, early trends in the next cycle.
Next cycle of unemployment?
Unemployment? What causes unemployment? What happens when the cause of unemployment is reversed?
“Early, early trends in the next cycle.”
Exactly, like night follows day, the system never changes.
The number of new retirement village units has also dropped away sharply, falling by 40.3% in the year to August
Not according to your chart - RV units dropped from 310 in Aug23 to 275 in Aug24.
The chart shows the monthly figures. The article refers to annual figures - "year to August."
I find it interesting that annual consents are still running at 33K. There are always those who have money and love a new house or have a particular reason to build. However there is little point in building from a purely economic perspective. Single level running north of $3.5K per sqm for something half reasonable. Walk up apartments $5.5K+ per sqm. These rates, plus professional and Council fees make it a futile exercise, that will likely burn capital.
Do you suspect building cost per sqm is gonna come down? I would have thought the only way that would happen is mass deregulation.
You may find these tables helpful in regards to cost per sqm youngdumb: https://www.interest.co.nz/property/residential-building-consent-analys…
Yes despite the large drop in consents, the numbers aren’t that bad and similar to the ‘pre boom’ norm.
I think there’s a few things at play here. ‘Hopium’ is one of them. That is, developers consenting projects with the hope / expectation that the market will pick up. Some will start building now, if they aren’t relying on pre-sales, with an aim of completing the projects in early 2026, when the market should be in an upwards leg.
For those reliant on pre-sales, many will hold off building till mid to late 2025, they will start marketing February / March 2025 - summertime, interest rates falling etc
The upside of all this is I expect building starts remain sickly till mid 2025, but then start picking up late 2025.
but some areas of Auckland will face real headwinds for new housing supply with the new development contributions.
Funny enough that is what commentators were saying back in 2011 and then consents hit 12,900 in 2012. We will be lucky if it just stops there this cycle. People who think this is great need to remember the shortages that this created in both houses and labour.
Could this be part of a cycle? Short on housing supply again in 3 years.
So new builds down and this is going to cause a massive hole in housing for years, interest rates crashing, summer is coming, who honestly thinks house price are not going to go up ?
Probably all the people leaving.
Do you know why interest rates are going down Zwifter ? It's because the economy is in the crap and to get it moving again, the banksters lower the interest rates, to push more DEBT out there for the "Property Ponzi Party" ....so if you are so sure of your convictions, get out there and pick up those "bargains" ....or are you in the "vested interest" brigade where the sales of property affects your income ?
Prime opportunity for the GOVT to start diverting all property investment into building new homes, rather than allowing "investors/speculators/capital gains bros" buying up lower quartile properties (once again locking out FHB/next generation/future of the country).
The longer the status quo continues, the more younger folk will head overseas.
Customs passenger stats June to August 1.44m arrivals 1.45m departures. That's -10k for 3 months. Try to get away with a population pump now. You won't. The grounds for the previous pump and dump were spurious. Remember the great nursing shortage ? We literally have thousands of immigrant nurses who can get jobs as nurses.
The targets of the pump and dump are getting wise now. The NZ immigration ROI is not what it once was.
But won't people come flooding because NZ is O for Oarsome, oh wait ...
https://www.rnz.co.nz/news/national/529404/uk-family-awarded-over-18k-a…
Have a look at March to May on those customs numbers…
Let's all remember that it's not in our Prime Minister's and his property investor buddies best interest to reduce house prices and make life easier for those not already owning their own homes...
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