Overall, there were 1,991 new homes consented in January, down 28 per cent compared with January last year. In the year ended January, the actual number of new houses consented was 36,453.

Fewer new homes were consented in January than in each of the previous five January months, says Michael Heslop, Stats NZ construction and property statistics manager.

New dwellings consented in January comprised 899 stand-alone houses, down 16 per cent compared with January last year; 899 townhouses, flats, and units; 123 apartments and 70 retirement village units.

Looking under the surface, the number of standalone homes being consented remains low.

More notable, however, is that the number of townhouses and other medium-density developments consented are dropping fast, says Westpac senior economist Satish Ranchhod.

“That highlights the fact developers are reluctant to bring new projects to market given high financing costs and a slow market for sales. While build cost inflation has eased off over the past year, costs remain high.”

Widespread downturn

The downturn has been widespread across the country, with Auckland consent numbers down 28 per cent over the past year, Wellington down 41 per cent and Canterbury down 24 per cent.

“We are expecting a sizeable downturn in building activity this year, with many of those we’ve spoken to in the building industry reporting a sharp drop in forward orders,” Ranchhod says.

The extent of any softening has until now been moderated by the pipeline of projects which were consented over the past few years. The number of planned projects rose rapidly in the wake of the pandemic, but shortages of materials and labour resulted in lengthy delays for many projects. 

Non-residential consent numbers did rise in January, but the longer-term trend remains down. The amount of non-residential floor space being consented fell 10 per cent over the past year.

Developers have highlighted higher financing costs and concerns about slowing economic growth as key factors putting the brakes on new projects. 

The annual value of non-residential building work consented was $9.9 billion, up four per cent from the year ended January 2023.

In the year ended January 2024, the number of new dwellings consented per 1,000 residents was seven, compared with 9.6 in the year ended January 2023.