Surging consents signal more supply, yet economic uncertainty clouds delivery
New Zealand’s home‑building pipeline is filling again, offering some medium‑term relief for first‑home buyers and property investors. But economists warn the delivery of that supply is increasingly uncertain.
Stats NZ figures show 37,534 new homes were consented in the year to February, up 12% on the previous year. Economic indicators spokesperson Michelle Feyen noted that “the annual number of new home consents has increased for seven consecutive months,” taking annual consents to their highest level since late 2023.
Auckland remains the engine of growth, with 15,972 new homes consented, up 16% year‑on‑year, driven largely by townhouses and other medium‑density projects. Canterbury also recorded a 16% lift, while Wellington consents jumped 18%.
On a per‑capita basis, Canterbury and Otago are now leading the country, each with just over 10 new dwellings consented per 1,000 residents, compared with 8.8 per 1,000 in Auckland and a national average of 7.1.
Multi-unit builds dominate as regions power ahead
More than half of all new homes consented over the year were multi‑unit dwellings. Townhouses, flats and units totalled 16,303, up 15%, while apartments rose 34% to 2,467. Retirement village units were broadly flat. Stand‑alone house consents also picked up, rising 7.8% to 17,089 in the year to February.
Westpac senior economist Satish Ranchhod says residential consents have risen 12% over the past year, calling the lift “an encouraging sign” for future activity. However, he stresses that the latest figures “pre‑date the advent of war in the Middle East,” and that the past month has brought “a significant increase in economic uncertainty, along with upward pressure on borrowing costs.”
Stronger pipelines in Auckland, Canterbury, Wellington, Waikato, and Otago point to more lending opportunities tied to new builds, townhouse projects, and investment stock, but also greater exposure to construction delays and cost overruns if conditions deteriorate.
Uncertain economy could slow actual building and demand
Ranchhod warns that anecdotes from the construction sector point to rising costs, with “a clear risk of further increases over the coming months.”
Recent cost data backs that up. The latest QV CostBuilder update shows elemental and trade costs up an average of 0.4% over the month, with diesel‑intensive work such as excavation and site preparation posting much larger rises.
Westpac has revised down its house price growth forecasts and now expects any recovery in building activity to be more gradual than previously anticipated, as weaker economic conditions weigh on buyer demand and developers become more cautious about launching new projects.
QV’s quantity surveyors also note that while overall cost growth remains relatively modest, volatility has increased as fuel and freight re‑emerge as key cost drivers, making project feasibility more sensitive to shocks than in the immediate post‑COVID period.
Non‑residential activity has held up, supported by industrial and office projects, but retail developments remain softer. Looking ahead, Ranchhod expects businesses to be cautious about major capital expenditure given the heightened uncertainty.
For more information, see the Stats NZ media release as well as the Westpac commentary.
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