New home consents are on the rise, but challenges remain

Friday, 2 May 2025

There were 34,062 new home consents issued nationwide in the year to March, Stats NZ says.

There was a strong increase in new home consents in March, but the industry should not become too upbeat on future market trends at this stage, economists say.

Stats NZ’s latest figures show there were 3398 new home consents issued in March, up 9.6% from February (once seasonally adjusted) and 16% from the same time last year.

Consents for 34,062 new homes nationwide were issued in the year ended March, a 3.3% decline on the year to March 2024.

But it was up on the annual tallies of recent months, which were 33,595 in February and 33,812 in January.

Infometrics chief forecaster Gareth Kiernan said the figures showed more upward momentum, with the monthly result the strongest since mid 2023.

Infometrics’ Gareth Kiernan is cautious about becoming too upbeat on future consent trends.

Much of the lift was due to apartments, with March seeing the largest number consented for any single month since 2022, he said.

“But standalone houses and townhouses were also up significantly, and the annual total for house consents was up 7.1% from last June’s trough to its highest level since October 2023.

“The annual consent total is at its highest since May last year, and the March quarter result was 12% above the estimate published in our recent forecasts.”

He said the result would be welcome news for the residential construction industry, given the 34% decline in consents from their mid-2022 peak.

“At this stage, we are cautious about becoming too upbeat on future consent trends, given that almost half of March’s outperformance was due to apartment consents, which are notoriously lumpy.

“But continued increases in house consents, along with some emerging upward momentum in townhouse consents, do give cause for optimism about prospects for activity.”

A large supply of homes for sale, slowing population growth and uncertain economic conditions meant any upturn in consent numbers over the next 12 to 18 months was likely to be modest, he said.

The Stats NZ figures show some emerging upward momentum in townhouse consents, Kiernan says.

Westpac senior economist Satish Ranchhod said annual consent numbers were the best gauge of where the home building sector was heading - and they suggested conditions were still pretty flat.

Consent issuance had been running at around the 34,000 level for most of the past year, and he expected issuance would remain around current levels over the next few months, he said.

“That’s consistent with building activity remaining relatively subdued over the coming months.

“But we expect the number of new developments coming to market starting to turn higher through the latter part of this year, thanks to the sharp drop in interest rates in recent months.”

That would support a recovery in the housing market and house prices over the course of this year, he said.

“Even so, the recovery in construction activity is likely to be gradual, with consents expected to turn higher through the latter part of this year, and a lift in building activity to follow that.”

Meanwhile, a list of New Zealand’s busiest building companies was released on Thursday, and it showed the big players in the industry are navigating the challenges of the downturn.

Retirement village giant Summerset is currently one of the biggest builders in the country, the Construction League report shows.

The third annual Construction League report, which is produced by BCI Central and Hubexo, ranked the country’s top 50 builders by the total value of projects that started construction in 2024.

Hawkins took out the number one spot, with more than $1.2 billion of work across 31 projects under way. It was followed by Naylor Love with $828 million of work on 94 projects, and LT McGuiness with $763m of work on 18 projects.

Rounding out the top five were Southbase Group with 19 projects worth $575.9m, and retirement village giant Summerset Group with five projects worth $490m of work.

Watts and Hughes, Kalmar, Apollo Projects, Built NZ and Fletcher Living were the other companies in the top 10, and together the top 10 builders accounted for 256 projects totalling over $5b.

Hubexo APAC president Ashleigh Porter said the league data showed an industry meeting adversity with determination and expertise to deliver essential construction projects.

Many of the companies in the top ten had a focus on commercial and community infrastructure work, such as hospitals and schools, and it was common to see that when the residential sector was subdued, she said.

“Agility and diversity were a big focus for building companies in 2024, but it’s necessary to have the flexibility to go where the market is. Bigger companies can do that more easily.

“It’s small to medium sized companies that find it harder, and that has been a problem for some, with insolvencies often having a domino effect and impacting on contractors and labour.”

While many building companies they talked to mentioned delays in, and deferrals of projects, some also pointed to the introduction of the fast track consent process as having a positive effect, Porter said.

“Construction costs are stabilising, although they are still not where many would like them to be, and we are hearing more positive sentiment about the industry’s outlook than we have for several years.

“But while there is cautious optimism from bigger building companies, it is still likely to be a rocky road ahead for many of the smaller companies in the market.”