A significant slump has been underway in the number of building consents issued for premises involved in the transportation and sale of goods around the country, such as retail premises and warehouses.
The latest figures from Statistics NZ show just 35 consents were issued for new retail premises in the fourth quarter (Q4) of 2024, down from 46 (-24%) in Q4 2023.
That was the lowest number of consents issued for new retail premises since Statistics NZ began publishing the data in its current format in 1990.
There was a similarly dramatic slump in the number of consents issued for new storage buildings such as warehouses, which dropped to 66 in Q4 2024, down 30% compared to Q4 2023.
That was the lowest number of consents issued for new storage buildings in any quarter of the year in the last 32 years.
The total amount of floor space consented for both types of buildings was also very low.
Just 21,110 square metres of new retail space was consented in Q4 2024, which was the second lowest amount in any quarter since 1990. And just 124,413 square metres of new storage space was consented in in Q4 2024, the lowest amount in any quarter since Q3 2019.
However, while the above figures suggest there will be less retail premises and warehouses being built, there has been no let up in high building costs for these types of projects.
According to interest.co.nz's Commercial Building Consent Analysis tables, the estimated build cost of new retail premises consented in Q4 2024 was a record high of $4920 per square metre.
There is only one other occasion when the build cost for retail premises was above $4000 per square metre. That was in Q2 2024, when it hit $4220, so the latest increase is substantial.
While the estimated build cost for new storage buidlings of $2142 per square metre was not a record high, it was certainly up there compared to previous quarters.
There have only been four quarters when the estimated build cost for storage buildings were above $2000 per square metre, all of them in the last two years.
Those building cost figures could suggest two things - that commercial building costs show no sign of easing yet and/or that the new projects that are being consented are being aimed towards the upper end of the market.
The full Commercial Building Consent Analysis tables, showing the average size and consented build cost for new office, retail, storage and factory buildings going back to 2010 in each of the main centres, are available to view here.
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