November 23rd, 2024
New Zealand's housing and property market has been facing challenges, as evident in the latest figures released by Stats NZ. This decrease in the number of new homes consented is a cause for concern, especially given the current housing crisis in the country.
The decrease in new homes consented is likely to exacerbate the existing housing issues in the country, and the adverse weather events that have impacted some regions may lead to further disruptions in the coming months. It is clear that the government needs to take urgent action to address the housing crisis and ensure that there are enough affordable homes for all New Zealanders.
New Zealand's housing market has experienced a significant drop in new homes consented in February 2023, according to data released by Stats NZ on 31 March. The 29% decrease compared to February 2022 is the largest on record, marking a continuation of a trend of decreasing new home consents since early 2022. This trend is also reflected in the year-end data, which shows a 3.3% drop in the number of new homes consented in the year ending February 2023. The decline in stand-alone houses contributed to the fall in the total number of new homes consented, while multi-unit homes, including townhouses, apartments, and retirement village units, experienced an increase of 15% in the same period.
Decrease in new home consents trend continues in New Zealand
The trend for the number of new homes consented has been decreasing since the peak in early 2022. In seasonally adjusted terms, the number of new homes consented in February 2023 fell 9% compared with January 2023. This follows a seasonally adjusted fall of 5.2% in January 2023.
Nearly all regions in New Zealand saw fewer homes consented in February 2023
In February 2023, all regions in New Zealand except Bay of Plenty and Marlborough consented fewer new homes compared with February 2022. The monthly fall in homes consented was seen across nearly all regions, including those not directly affected by Cyclone Gabrielle, which may have caused some disruption to consent issuance in affected regions in February. The numbers of new homes consented in regions that contributed most to the overall monthly decrease were 128 in Otago (down 47% compared with February 2022), 517 in Canterbury (down 46%), 202 in Wellington (down 35%), and 1,289 in Auckland (down 21%).
Annual number of new homes consented down by 3.3% in New Zealand
In the year ended February 2023, 48,257 new homes were consented in New Zealand, down by 3.3% compared with the year ended February 2022. Over the same period, there were 27,872 multi-unit homes consented, up 15%, while the number of stand-alone houses fell by 20% to 20,385. Multi-unit homes include townhouses, apartments, retirement village units, and flats.
Weather events may impact home consenting numbers in New Zealand
The adverse weather events in early 2023 may impact home consenting numbers in affected regions in the coming months. Some emergency repairs do not require a building consent and will, therefore, not be included in future building consent issued data.
The decline in new home consents in New Zealand raises concerns about the future of the construction sector, which has been an important driver of the country's economic growth in recent years. The decrease in the number of new homes consented could lead to a housing shortage in the future, making homes less affordable for many New Zealanders.
Declining trend in stand-alone houses
The number of stand-alone houses consented fell by 20 percent in the year ended February 2023 compared with the previous year. In contrast, the number of multi-unit homes consented, which includes townhouses, apartments, retirement village units, and flats, increased by 15 percent in the same period, Stats NZ data show.
The decline in the number of stand-alone houses could be due to several factors, including the rising cost of land, building materials, and labor. Additionally, the preference for multi-unit homes among first-time buyers, downsizers, and retirees is increasing, leading to a shift away from stand-alone houses.
Overall decline in annual new homes consented
The annual number of new homes consented in the year ended February 2023 was 48,257, down by 3.3 percent compared with the year ended February 2022. The decrease was driven by a fall in the number of homes consented in the stand-alone house category. However, the number of multi-unit homes consented increased in the same period. The decline in the annual number of new homes consented could be attributed to the continued impact of the COVID-19 pandemic on the construction industry, including the shortage of building materials, supply chain disruptions, and labor shortages.
Impact of adverse weather events on home consenting
According to Stats NZ, adverse weather events in early 2023, including Cyclone Gabrielle, may have impacted the number of homes consented in affected regions in February 2023. Although emergency repairs do not require a building consent, they will not be included in future building consent issued data. The adverse weather events could continue to impact home consenting numbers in affected regions in the coming months, depending on the extent of the damage and the availability of resources.
