New Zealand home building consents drop to five-year low

NEW Zealand residential building consents fell to a five-year low in 2023, pointing to a slowdown in construction that may cool economic growth in coming quarters.

Permits issued in the 12 months through December fell 25 per cent from the year-earlier period to 37,239, Statistics New Zealand said on Friday (Feb 2) in Wellington. That’s the lowest calendar-year level since 2018.

Annual approvals have declined from a peak of more than 51,000 in May last year as increasing construction costs and high interest rates made people less inclined to buy new homes and developers reluctant to build them. The slowdown adds to signs that economic growth will almost stall this year in the face of tight central bank monetary policy that is damping spending and investment.

Still, there is a risk that record immigration will stoke demand for property at a time of dwindling supply, which may boost house prices.

The drop in consents was across the board with standalone house approvals falling 27 per cent to 15,675 and multi-unit homes dropping 23 per cent to 21,564, the statistics agency said. It was the first year multi-unit home consents exceeded standalone dwellings.

Permits for retirement units fell 23 per cent from 2022 while apartment consents slumped 43 per cent to the lowest since 2016. BLOOMBERG