Residential building

Updated: 17 March 2010

Residential building remains low in both volume and value

The total unadjusted value of residential building work put in place for the December 2009 year was $5.875 billion; a 19.8 percent decrease from the previous December year. When adjusted for inflation, the trend value also showed consecutive declines since the December 2007 quarter.

An indication of the volume of building work likely to occur in the future can be gained from monthly data on building consents granted by territorial authorities, obtained from Statistics New Zealand. It reflects consents valued at $5,000 or more and is in current values.

The unadjusted value of residential building consents for January 2010 was $380 million.  Monthly statistics shows that the trend value of all residential building consents has been declining since its peak at $690 million in June 2007 to $387 million in March 2009, but has been increasing since May 2009 (see Figure 6). 

Figure 6: Value of residential building consents (to January 2010)

_{Source: Statistics New Zealand}

The monthly number of new dwelling consents (including apartments) issued has been well below the 2,373 mark since April 2008. The number of new dwelling consents issued in the year to January 2010 was 14,655 or 16.4 percent lower than the 17,525 new dwelling consents issued in the year to January 2009. This current annual number reflects the weak level of new dwelling construction activity. Although the monthly numbers have risen from the 812 (the lowest level recorded) in January 2009 to 1,042 in January 2010, consent numbers remain low compared to historical levels (see Figure 7).

Figure 7: Number of consents for new dwelling units (to January 2010)

_{Source: Statistics New Zealand}

The number of consents for apartment units can vary considerably from month to month. The number of new apartments authorised in the December 2009 quarter was 238 and this is 18.5 percent lower compared to the December 2008 quarter.

The annual number of consents for new apartments peaked in 2004 and has since been declining. The number of new apartments fell by 36.9 percent from 2,298 in the year to December 2008 to 1,449 in the year to December 2009.

Figure 8: Number of new apartment consents (to December 2009)

_{Source: Statistics New Zealand}

This reduction in the building of new dwellings will put pressure on the market in the future as emerging housing needs create a greater demand than can be supplied.