Residential building

Updated: 10 November 2009

Residential building remains low in both volume and value

The total unadjusted value of residential building work put in place for the June 2009 year was 6.373 billion; a 24.3 percent increase from the previous June year. When adjusted for inflation, the trend value also showed consecutive declines since the December 2009 quarter, but this decline has been less steep from the December 2008 quarter onwards.

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.

Statistics from September 2009 show the trend value of all residential building consents has been declining since its recent peak at $688 million in June 2007 to a low of $388 million in March 2009, but has been increasing since April 2009 (see Figure 6). The unadjusted value of residential building consent for September 2009 was $480 million.

Figure 6: Value of residential building consents (to September 2009)

Source: Statistics New Zealand

The monthly number of new dwellings (including apartments) issued has been well below the 2,000 mark since May 2008. The number of new dwelling consents issued in the year to September 2009 was 13,616 or 35.2 percent lower than the 21,003 new dwelling consents issued a year ago. This current annual number reflects the weak level of new dwelling construction activity. Although the monthly numbers has bottomed out from the 812 recorded in January 2009 to 1,430 in September 2009, consent numbers remain low compared to historical levels.

Figure 7: Number of consents for new dwelling units (to September 2009)

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 September 2009 quarter was 240 and this is 60.2 percent lower compared to the June 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 37.3 percent from 2,399 in the year to September 2008 to 1,503 in the year to September 2009.

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

Source: Statistics New Zealand

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