New figures have shown the annual number of homes consented to – new residential building projects embarked on – is again down compared to the year prior.
Stats NZ says that in the year ending January 2025, 33,812 new homes were consented to, down 7.2% compared with the year ending January 2024.
The annual value of non-residential building work consented was $8.9 billion, down 9.7% from the year ended January 2024.
11% more new homes were consented to in January 2025 compared to January 2024, but economic indicators spokesperson Michael Heslop says figures still remain below the levels seen in January 2022 and 2023.
Of the 2,203 new homes consented, there were 1,077 stand-alone houses consented, up 20% compared with January 2024, and 1,126 multi-unit homes consented, up 3.1%.
These findings from Stats NZ paint an especially grim picture when paired with QV CostBuilder’s latest study, which found building costs have increased at an average rate of 44% over the last four years despite the rate of inflation slowing markedly last year.
The study compared the cost of building a standardised 150m² home across six main urban centres – Auckland, Wellington, Christchurch, Dunedin, Hamilton and Palmerston North.
“Despite always being the most expensive city to build a home in overall, construction costs actually increased by the smallest margin in Auckland (39.4%). Christchurch (40.5%) wasn’t far behind, with Hamilton (44.8%) sitting just above average,” QV reported.
“In real dollar terms, however, Wellington saw the largest average increase in the cost to build a home; its average build cost increased by $900 per square metre in four years. As a percentage, the cost of building a home in the capital increased by an average of 45.9% since 2020.
“But the good news for developers or for anyone looking at building a home is that the rate of building cost inflation has slowed markedly in recent years. In 2024, costs increased at a rate of between 0.7% and 2.2% across these six main urban areas.
“The smallest percentage increases last year were in Auckland (0.7%) and Hamilton (0.7%). Palmerston North (2.2%) saw the largest increase in 2024.”
“There are currently no significant differences in the rate of construction cost increases across the country. What these numbers show is just a relatively small difference in cost, which can be attributed to variable labour rates, different company overheads, some variance in materials, and differing transport costs across the country,” quantity surveyor Martin Bisset says.
“After years of pronounced inflation that came as a result of managing the COVID-19 epidemic here and abroad, it’s good to see that construction costs have become significantly more stable in recent years. Hopefully, the years of such staggeringly large construction cost increases are now firmly in the rear-view mirror.”
Ongoing geopolitical instability in Ukraine and the Middle East, the proliferation of US-led trade wars, and increased tariffs on construction materials also impact the cost of building homes in New Zealand, he adds. “Given that Aotearoa relies so heavily on importing building materials, a lot always depends on the buying power of the New Zealand dollar.”
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