Residential building consents

Councils keep processing consents despite lockdown

2 Jun 2020

Our take on the latest Residential building consents (Tue 2 Jun 2020)

Annual dwelling consents
37,180
As at April 2020
Total consents down 17% from April 2019
Attached dwelling consents down 14%pa

The key numbers...

  • Councils continued to issue consents during the lockdown, with StatsNZ recording 2,168 new dwelling consents in April.
  • Despite councils’ work continuing largely uninterrupted, consents are still softening, with 437 fewer new dwellings in April 2020 compared to the same month in 2019. This 17%pa drop is the largest since mid-2011.
  • Standalone house consents (-18%pa) dropped more sharply than attached dwellings (-14%pa).
  • Regional fortunes show a range of outcomes, with steeps falls in Southland (-73%pa), Taranaki (-68%pa) and Wellington (-56%pa) even as consent numbers rose in Hawke’s Bay (+25%pa), Tasman (19%pa), and Waikato (9.1%pa).

Lockdown hits consent numbers

New dwelling consents
3624

...and our reaction

  • The fallout from COVID-19 for the construction sector isn’t yet apparent in consent numbers, with local councils still able to process consents during the Level 4 lockdown.
  • We believe the slow decline in consents reflects that consents being issued in April were most likely submitted in March prior to the lockdown occurring, which has kept consent volumes higher than might have been expected.
  • However, it is important to point out that consents are only intentions to build, and so building activity could well turn faster than consents suggest given the highly uncertain economic conditions.
  • Financing issues are becoming increasingly apparent for housing development, which will also restrict actual construction activity moving forward, as new projects will have limited access to funds.