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Source: MIL-OSI Submissions

Drop
in number of new homes consented – Media release

2 June 2020

The number of new homes consented in April
2020 was nearly 17 percent lower than in April 2019, Stats NZ said today.

This was the biggest percentage fall in monthly
consents compared with the same month in the previous year since July 2011.

A total of 2,168 new homes were consented
in April, bringing the number of new homes consented in the April 2020
year to 37,180. This was slightly down from the February 2020 year, which
produced a 45-year record of 37,882 new homes consented.

New Zealand was in alert level 4 from near
the end of March till almost the end of April, with the closure of non-essential
businesses, including construction sites.

There was a large drop in the number of new
homes consented in April, reflecting a range of factors. These include
the direct impact of COVID-19 on plans to build, as well as any changes
to how consents were lodged and processed by councils during the lockdown.

“Ultimately, there is still a large amount
of uncertainty around the implications of COVID 19 on the future supply
of homes,” acting construction indicators manager Dave Adair said.

“Typically, many homes are built within
about a year of gaining consent, but these are unusual times and it will
take some time to see if existing consented projects are completed or delayed.”

The uncertainty caused by COVID-19 is further
highlighted in the regional home consent figures. Consents in some regions
fell sharply, while others remained relatively unchanged from the previous
month. For example, consents in Wellington roughly halved in the month
while Canterbury consents held up.

A clearer picture of the impact of COVID-19
on the construction industry will be provided by ‘Value of building work
put in place’ results 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.

Seasonally adjusted fall in number of
new homes consented

In seasonally adjusted terms, the number
of new homes consented fell by 6.5 percent in April 2020, following a fall
of nearly 22 percent in March 2020.

The number of homes consented each month
can vary significantly due to timing of large multi-dwelling projects,
such as townhouses and apartment buildings. Results may also be affected
by the COVID 19 pandemic and the uncertainty surrounding its implications.
We recommend focusing on annual results when looking at changes over time.

Decrease in value of non-residential consents

The value of non-residential building consents
dropped to around $364 million in April 2020, which is the lowest value
since January 2017. The average monthly value of non-residential building
consents in 2019 was around $622 million.

“There is a lot of volatility in the month-on-month
figures for non-residential building consents, however the value of consents
has been decreasing since November 2019. The long-term effects of the COVID
19 pandemic on non-residential building consents remains to be seen in
the future releases of ‘Value of building work put in place’,” Mr Adair
said.

MIL OSI New Zealand News