December 3rd, 2024

Decline in home consents in New Zealand highlights challenging February

Stats NZ reports a 6% drop in new home consents compared to last year

The breakdown of the consents showed a 0.5 percent decrease in stand-alone houses and a more significant 10 percent decline in multi-unit homes, which includes townhouses, apartments, retirement village units, and flats.
The breakdown of the consents showed a 0.5 percent decrease in stand-alone houses and a more significant 10 percent decline in multi-unit homes, which includes townhouses, apartments, retirement village units, and flats.

The number of new homes consented in February 2024 experienced a 6.0 percent decline from the same month last year, with a total of 2,795 consents issued across New Zealand, according to a recent media release by Stats New Zealand.

A closer look: Varied impacts across housing types

Michael Heslop, the construction and property statistics manager at Stats NZ, provided insight into the decline. "Fewer new homes were consented in February 2024 than in each of the previous five February months," Heslop said, noting, however, that "the number of new homes consented was still higher than any February month between 1975 and 2018."

The breakdown of the consents showed a 0.5 percent decrease in stand-alone houses and a more significant 10 percent decline in multi-unit homes, which includes townhouses, apartments, retirement village units, and flats. Despite the overall downturn, apartments bucked the trend with a 13 percent increase, while retirement village units saw a steep 58 percent decrease.

Seasonal adjustments and annual trends

In seasonally adjusted terms, there was a surprising 15 percent increase in new home consents from January 2024, following a seasonally adjusted fall of 8.6 percent in January 2024. Seasonal adjustment aims to remove the effects of regular seasonal patterns to provide a clearer view of underlying trends.

However, the annual picture presents a starker reality, with a 25 percent reduction in the number of new homes consented in the year ended February 2024, compared to the previous year. Both multi-unit homes and stand-alone houses experienced similar declines, contrasting with the previous year's trends where multi-unit home consents increased as stand-alone house consents decreased.

Regional disparities

The regional breakdown reveals a broad decrease in new home consents across all regions except Gisborne and Hawke’s Bay. Auckland, Canterbury, Waikato, and Wellington were among the hardest hit, with Wellington experiencing a 40 percent decline.

Spotlight on Gisborne

Gisborne stands out as a beacon of growth amidst widespread decreases, with a 27 percent year-on-year increase in new homes consented, largely driven by a rise in multi-unit homes. "Gisborne is the only region that has recorded a consistent annual increase in the number of homes consented since the year ended October 2023," Heslop highlighted. This growth has seen Gisborne's new dwellings consented per 1,000 residents rise to 3.7, closing the gap with the national average.

The backdrop: Cyclone Gabrielle's lingering effects

The statistics come in the wake of Cyclone Gabrielle, which impacted the Gisborne region in early February 2023 and may have influenced building consent issuance patterns since. This contextual backdrop adds a layer of complexity to interpreting the latest consent figures and their implications for New Zealand's housing market and regional development strategies.

The bottom line: A challenging start to 2024

The decline in home consents in February 2024 underscores the challenges facing New Zealand's housing sector, with varying impacts across different types of housing and regions. While Gisborne shows signs of growth, the overall trend indicates a cooling in the housing market, against the backdrop of recent natural disasters and ongoing adjustments in the sector.