Fewer new homes are being built but the cost of building them keeps rising
By Greg Ninness
The number of new homes being consented has nosedived by more than a third over the last two years, but the cost of building them is still increasing, according to interest.co.nz's latest analysis of Statistics NZ's residential building consents data.
This shows 7717 new dwellings were consented throughout the country in the first quarter (Q1) this year, down from 9720 (-20.6%) in Q1 last year, and down from 12,333 (-37.4%) in Q1 2022.
At the same time the average estimated cost of building those homes has continued to rise.
The average estimated build cost (excluding land) of new dwellings consented in Q1 this year was $462,654, up $21,978 (+5.0%) compared to Q1 last year, and up $68,100 (+17.3%) compared to Q1 2022.
The increase in building costs is not due to any increase in the size of new homes, in fact the opposite is true.
The number of new homes being consented has nosedived by more than a third over the last two years, but the cost of building them is still increasing, according to interest.co.nz's latest analysis of Statistics NZ's residential building consents data.
This shows 7717 new dwellings were consented throughout the country in the first quarter (Q1) this year, down from 9720 (-20.6%) in Q1 last year, and down from 12,333 (-37.4%) in Q1 2022.
At the same time the average estimated cost of building those homes has continued to rise.
The average estimated build cost (excluding land) of new dwellings consented in Q1 this year was $462,654, up $21,978 (+5.0%) compared to Q1 last year, and up $68,100 (+17.3%) compared to Q1 2022.
The increase in building costs is not due to any increase in the size of new homes, in fact the opposite is true.
In Q1 2010, the average size of new homes consented was 202 square metres, and had steadily declined to 141 square metres in Q1 2024. That means the average size of new homes has declined by 61 square metres (-30%) over the last 14 years.
In the last two years, from Q1 2022 to Q1 2024, the average build cost has increased from $2695 per square metre to $3276 per square metre, up by 21.6%.
Similar trends are evident around the country, although there are regional differences in building costs.
Interest.co.nz analyses building consents by major dwelling types - houses, units/townhouses, apartments and retirement village units, in each of the main urban areas of Auckland, Waikato, Bay of Plenty, Wellington, Canterbury and Otago.
This shows the average build cost (excluding land) across all dwelling types in Q1 this year, ranged from $2867 per square metre in Canterbury to $3960 per square metre in Otago, with Auckland pretty much in the middle at $3328.
The tables showing the full quarterly consent analysis by major urban region and dwelling type, going back to 2010, are available on Interest.co.nz's Residential Dwelling Consent Analysis page.
This story was originally published on Interest.co.nz and has been republished here with permission.
