Westpac analyses dip in NZ residential consents
The New Zealand housing market saw a general decline in the number of new home consents issued in 2024, with a total of 33,600 homes approved, marking a 9.8% decrease from the previous year.
Stats NZ highlighted this downturn as part of a broader trend affecting almost all regions.
“Otago was the only region with an increase in the number of new homes consented in 2024,” said Michael Heslop, economic indicators spokesperson at Stats NZ.
Regional disparities in home consents
Despite the overall downward trend, Otago emerged as the standout region with a 19% rise in home consents, primarily fueled by developments in the Queenstown-Lakes district.
“The increase in the Otago region was largely driven by the Queenstown-Lakes district,” Heslop said.
In contrast, major regions such as Auckland and Wellington saw declines of 10% and 24%, respectively.
Stand-alone homes versus multi-unit developments
The national landscape for housing types was mixed.
Stand-alone houses saw a slight increase of 0.7% in consents.
However, multi-unit homes, which include townhouses, apartments, and retirement village units, experienced a significant drop. Townhouses and units fell by 16%, apartments by 21%, and retirement village units saw the most substantial decrease, with a 25% drop, reaching a decade low in consents.
Per capita consent rates
The ratio of homes consented per 1,000 residents also declined, with the national average dropping from 7.1 to 6.3.
Otago and Canterbury were the top performers in this metric, with Otago recording an increase from 7.7 to 9.1 homes per 1,000 residents, reflecting its regional growth.
Economic factors influencing building activity
Satish Ranchhod (pictured above), senior economist at Westpac NZ, highlighted key economic measures impacting the sector.
“The RBNZ cuts the OCR 125bps last year, and we expect a further 100bp of cuts in the first half of this year,” Ranchhod said.
These interest rate reductions are anticipated to gradually aid the recovery of the housing market and subsequently support a resurgence in housing development. However, this recovery is expected to be gradual, with material increases in consent numbers not forecasted until the second half of 2025, he said.
Westpac on future outlook for construction activity
While residential consents showed signs of bottoming out, the commercial sector is still active with significant developments in office space and industrial buildings.
Despite the economic challenges, there is an expectation that building activity will slowly pick up as the market conditions improve, driven by lower borrowing costs and a strengthening housing market, Ranchhod said.
