Consents for new residential buildings plunge 21 per cent

More borrowers have had to turn to non-bank lenders after being rejected by the main banks. Photo / Getty Images

Consents from councils around New Zealand for new residential buildings plunged 21 per cent in this latest quarter compared to the same time a year ago, data out today showed.

StatsNZ said 9719 new homes were consented in the three months to the end of March, compared with 12,333 the same time last year. .

And summer’s bad weather might take a further toll.

“We only identified a few alterations that mentioned flooding or cyclone repair work in this month’s data, however some repairs may not include this information on the consent application. Some emergency repairs do not require a building consent and will therefore not be included in future building consent issued data,” information out today said.

As interest rates rise, inflation spirals and lending criteria tighten, the market for new housing has turned and the latest data is reflecting that.

The four regions with the highest number of new homes consented in the year ended March 2023 were:

• Auckland with 20,312, down 5.4 per cent, compared with the year ended March 2022;
• Canterbury with 8171, down 4.5 per cent;
• Waikato with 4511, down 14 per cent;
• Wellington with 3607, down 6 per cent.

Michael Heslop, construction and property statistics manager, said March last year eclipsed records and so was unusual.

”March 2022was the highest month on record,” Heslop said.

The seasonally adjusted number of new homes consented in the latest quarter fell 8.4 per cent, compared with the December quarter. This follows a seasonally adjusted fall of 9.2 per cent in the December quarter.

Seasonal adjustment removes the estimated effect of regular seasonal events from statistical series. This makes figures for adjacent periods more comparable, StatsNZ says.

There were 46,924 new residential consents granted in the year to March, down 7.9 per cent annually.

Of those, 19,668 were stand-alone houses, down 23 per cent compared with the year ended March 2022.

More flats, units and townhouses are being built: 27,256 multi-unit homes were consented, up 6.6 per cent over the same period.

The Herald has reported how mortgage holders collectively coped with paying a record amount of interest in the final three months of last year.

They paid $3.5 billion of interest to banks in the December quarter – 53 per cent more than just over a year earlier, when interest costs were the lowest on record.

Rising wages and comfortable levels of savings meant borrowers could handle the pain – then at least.

The portion of banks’ mortgage debt deemed “non-performing” remained low at 0.3 per cent in December, even though it rose from 0.2 per cent where it had been for most of the prior 15 months.

The number of households behind on their mortgage repayments is up 26 per cent on the same time last year, with 19,300 accounts past due.

New data from credit bureau Centrix this week showed mortgage arrears climbed for the eighth consecutive month in March.

However, levels are still low by historic standards, Centrix said.