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The size of new homes is declining while the cost of building them keeps going up


By Greg Ninness

The average size of new homes has shrunk by almost a third over the last 10 years while residential construction costs have more than doubled.

Between the third quarter (Q3) of 2013 and Q3 this year, the average floor area of new dwellings consented declined from 195 square metres (sqm) to 136 sqm, making new homes 30% smaller on average than they were 10 years ago, according to's latest Building Consent Analysis tables.

Over the same period, the estimated average construction cost for newly consented dwellings (excluding the cost of land), increased from $1598 per sqm, to $3225/sqm, up 102%.

The combination of smaller floor areas and higher construction costs, meant the average build cost for newly consented dwellings increased from $311,945 in Q3 2013 to $439,308 in Q3 2023, up $127,363 (41%).

The shift to smaller homes has mainly been caused by a move away from stand alone homes to multi-unit dwellings such as apartments, terrace houses and home units.

In Q3 2013, stand alone houses were the predominant type of new homes being built, accounting for 81% of new dwelling consents.

By Q3 2023 that market share had halved, with stand alone houses making up just 40% of new dwelling consents.

The decline in the number of new stand alone houses being built has been particularly steep since it peaked at 6940 in Q2 2021, dropping to 3626 in Q3 2023, the lowest it has been in any quarter of the year since 2012.

On the other hand the number of townhouses and home units consented has increased more than ten-fold over the last 10 years, rising from just 417 in Q3 2013 to 4436 in Q3 2023.

And while fewer stand alone homes are being built, they are also shrinking in size.

In Q3 2013 the average size of stand-alone houses being consented was 213 sqm, and by Q3 this year that had declined to 181sqm, (-15%).

However while the average size of new homes has declined significantly over the last 10 years, we are building a lot more of them.

In Q3 2013 just 5503 new dwellings of all types were consented but in Q3 2023 that had risen to 9126, up by 66%.

Unfortunately those numbers are now in decline.



The number of new dwellings being consented throughout the country peaked at 13,247 in the third quarter of last year and in then started to decline and had retreated by almost a third by the third quarter of this year.

The full quarterly analysis of new dwelling consent trends, including the average size and cost per square metre of homes being consented by dwelling type going back as far as 2010, nationally and in the main urban centres, is available on's Residential Building Consent Analysis page.

This story was originally published on and has been republished here with permission.