Consents for new homes remain high

The number of new homes consented in July 2020 was 3,391, the third month in a row of relatively high numbers, after a fall in April during the COVID-19 alert level 4 lockdown, Stats NZ said today.

“More than 10,000 new homes were consented in the last three months – the largest three-month rolling total since the 1970s,” acting construction indicators manager Dave Adair said.

“The high number of new homes consented was partly due to an increase in the number of townhouses, flats, and units.

“There may also be an element of catch-up after non-essential businesses closed in April.”

A total of 6,805 consents were issued for additions and alterations on stand-alone houses over the last three months, after a drop in April. This is the second-highest three-month total since records began in April 1990. The average in the last five years was 5,403.

“An increase in the number of consents for additions and alterations for stand-alone houses in July coincides with the border closure because of COVID-19, so some money set aside for overseas holidays may have gone into fixing up homes,” Mr Adair said.

“The high number of consents for new homes, as well as additions and alterations to stand-alone houses, is a positive sign for the residential construction industry, but it will take time to see if consents are actually carried through to construction.”

Consents are an intention to build, while value of building work put in place measures work completed, which better reflects delays or project cancellations.

Non-residential consents drop in July 2020 year

The value of non-residential building consents for the year ended July 2020 was about $6.7 billion, dropping over 11 percent from the year ended July 2019. In the last four months, the value of consents for hotels, motels, and other short-term accommodation have been much lower than most months in 2018 and 2019.

“We have seen the value of consents for short-term accommodation buildings drop in the last four months, likely reflecting the uncertainty the tourism industry is experiencing, with the border closed to new international visitors,” Mr Adair said.

This fall does not consider existing projects, which will be better understood in the Value of building work put in place release in the coming quarters. This series measures work actually completed, rather than consents, which indicate an intention to build. The data may include insights into delays, cancellations, and the total value of work put in place.