Non-residential building consents
Rush of office consents halts non-res decline for now
1 Oct 2024
Our take on the latest Non-residential building consents (Tue 1 Oct 2024)
Value of non-res consents
$953m
In August 2024
$316m of office consents in August
Public sector consents down 31% from August 2023
The key numbers...
- Non-residential consents recorded their best month since January, with $953m of consents issued in August, up 27% from a year ago.
- The growth was underpinned by $316m of office consents, representing the strongest month for this building type since May 2022. There was a $100m consent for Fisher & Paykel’s new headquarters, as well as consents totalling $102m of offices in Māngere-Ōtāhuhu.
- Other building types up from a year ago were social buildings (up $42m), factories (up $42m), and retail buildings (up $18m). Social building was boosted by a $34m consent as part of Te Hono – Avondale Community Centre and Library; a $25m consent as part of a data centre in Hobsonville was joined by other increases in consents in Maungakiekie-Tāmaki, Timaru, and Christchurch; and retail building was stronger in Taupō and Upper Harbour.
- Trends were less positive across other building types. Education consents were down $45m from August 2023, despite a $26m jump in consents in Selwyn, with falls recorded in Auckland, Marlborough, Central Otago, and Christchurch. Warehouse, hospital, and hotel consents all fell by $20-25m from a year ago.
Stronger in August, but risks of declines remain
Non-residential consents, annual running total, $m
...and our reaction
- The 51%pa increase in the value of private sector consents in August was the largest in almost two years. However, the contribution of several large consents to the result means it could be a false reading in terms of more stable levels of non-residential consents.
- In general, the business case for new construction remains difficult, with downward pressure on property prices and high construction costs. The lift in retail building consents in August was off a very low base, while office building consents also have limited growth prospects in the near term.
- Public sector work remains under considerable pressure, with consents in August down 31% from a year ago. This fall took year-end growth down to -23%, the biggest decline since early 2013, a trend that is reflected in both education and hospital building consents.
- Although non-residential consents could continue to show signs of stabilisation throughout the second half of this year, we expect weakness to re-emerge by early 2025 as difficult economic conditions continue into next year.
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