Fast-reducing townhouse consent levels are driving overall residential building consent levels into a sharp contraction, even if construction cost pressures ease

By David Chaston

There were 38,209 new homes consented in the year ended November 2023, down -24% compared with the 50,209 in the year ended November 2022, according to figures released by Stats NZ today.

In November alone, there were 2958 consents issued nationally, compared to 4649 in November 2022.

The least drop was for stand alone houses, down -20%, but townhouse consents dropped -31% and consents for apartments were down -77% to just 123 in November.

The value of all residential consents was down -29% in November from a year ago.

Overall residential consent levels are now back to those we had in the 2017-2019 period.

The number of new homes in the construction pipeline continues to decline sharply while the cost of building them does appear to be stabilising.

The number of new dwellings consented per 1000 residents is now running at just 7.3 for the year ended November, the lowest rate since 2018. It peaked nationally in 2022 after a long period where it ran very low (less than 4 per 1000).

In Auckland, that rate is 9.1 per 1000 residents and down from almost 13 in 2022. In Canterbury it is still running at 10.7, but in Wellington region it is only at 5 per 1000 residents.

The slowdown in this sector is embedding harder. We haven't seen a drop this quick or as long running nationally since 2011. For Auckland it is since 2008 even if it is off a much larger base in 2022/23.

Meanwhile, the value of alterations and additions are holding at recent levels, little-changed from October, or from November a year ago.