New residential dwellings consents took a hit in March after rising in February. Photo / Manfred Gottschalk
Building consent numbers show the industry is facing tough times but at least the only way from here might be up, bank economists say.
Stats NZ data for March showed the seasonally-adjusted number of new residential dwellings consented fell 0.2 per cent after rising 16 per cent in February.
Year-on-year, the actual number of new dwellings consented was 35,236, down 25 per cent from the year ended March 2023.
In March this year, 2931 new dwellings were consented.
They included 1297 townhouses, flats, and units, 1251 stand-alone houses, 224 apartments, and 159 retirement village units.
The value of non-residential building work consented for the year was $9.5 billion, down 1.1 per cent from the year ended March 2023.
“Looking at the longer-term trend, it’s clear that New Zealand’s building sector has moved into a tougher period,” Westpac economists said today.
“However, it looks like consent issuance is finding a floor.”
Consents for standalone houses, about 40 per cent of the total, had held firm for more than six months now, Westpac added.
The bank expected more weakness in what it called the volatile multi-unit space, which included townhouses and other medium-density developments.
But even in that part of the building sector, Westpac said the downturn was flattening off.
The bank said it expected building activity to keep dropping this year, consistent with the drop in consents issued.
“To date, that fall in building activity has been more gradual than the fall in consents, reflecting that building firms struggled to keep up with the number of new projects that were consented in recent years,” Westpac added.
And the bank expected residential building activity to drop 16 per cent from a recent peak, making the current downturn in building activity the sharpest since the 2008/09 financial crisis.
The situation was unlikely to change until interest rates came down and the housing market recovered, Westpac said.
Meanwhile, Barfoot & Thompson said separate new Auckland sales data suggested the city’s housing market was moving forward.
“In April, the Auckland housing market gave back half the gains it made in March but overall sales continued the forward momentum being made since the low point in July last year,” the agency said today.
Peter Thompson, Barfoot & Thompson managing director, said the median price this year went up by 4.2 per cent and the average price by 11.9 per cent.
“The median sales price for April at $1,007,500 was up 1.3 per cent on that 12 months ago, but down 4 per cent on that for March,” Thompson added.
“The median price still remains above the $1m mark, which has become something of a benchmark for the median price in Auckland.”
He said the agency’s average sales price in April was $1,212,828.
That was down 1.2 per cent from March but up 11.6 per cent from a year ago.
“April’s average sales price is at its highest level ever, even above those in 2021 and 2022, the years when house prices peaked,” Thompson said.
“Sales numbers for the month at 704 were down a third on those for March but the highest for the month of April for three years.”
He said housing in Auckland was still a buyers’ market with 5770 properties listed at the end of April.
The value of property sold in the rural and lifestyle markets last month was $40.2m, up nearly 50 per cent on the value of property in April 2023.
Thompson said these sales made some inroads into stock levels but there were still many properties for sale in the rural and lifestyle markets.
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