A weak end to 2025 for non-residential consents

The key numbers...

Non-residential building finished 2025 on a weak note, with just $584m of consents issued in December, the weakest result (in seasonally adjusted terms) since December 2024.

The total value of consents was 15% higher than a year earlier. However, the December 2024 result was particularly weak, being the second-lowest month for non-residential consents since 2013 (seasonally adjusted, after removing the effects of building cost inflation).

Office buildings made the biggest contribution to the lift in consents compared with December 2024, with a $74m increase taking the value of office consents for the month to $152m. Sizable increases occurred in Christchurch (up $41m), Māngere-Ōtāhuhu (up $26m), Hamilton (up $13m), and Tauranga (up $11m), although these rises were partly offset by declines in Whanganui (down $21m) and Hastings (down $13m).

Hostels also made a positive contribution, increasing by $34m from a year ago. This rise was underpinned by lifts in Waitematā (up $23m, due to a consent as part of the University of Auckland’s Carlaw Park Student Village) and Queenstown-Lakes (up $12m).

Factory building recorded the largest decline in consents from a year ago, down $34m, with factory consents in Hamilton down $18m and in Tasman down $11m. December’s result was the lowest month for factory consents, after adjusting for inflation, since January 2016.

The Wellington Region recorded the largest increase in consents from a year earlier, although this $60m lift to $87m of consents came off a very low base, and December’s result could only be considered a return to a “normal” month for the region. A $29m lift in education consents, with a new teaching block being built at Wellington High School, and a $15m increase in social building consents, led the rise.

...and our reaction

We had anticipated a stronger finish to the year for non-residential consents in our forecast published last week. The relative weakness in today’s result reinforces our view that non-residential building activity remains under pressure, and there will be further declines in work put in place during 2026.

A more positive trend continues to emerge in public sector activity, with the annual volume of public sector consents pushing up to a 13-month high. Increasing education consents have driven the recovery in public sector work over the last year.

The annual total of private sector work remains close to its lowest level since early 2022. However, these figures overstate the volume of consents coming through, because after building cost inflation is stripped out, private sector activity in November and December was at its lowest since mid-2014.

We continue to be cautious about prospects for consents this year. In general, we expect improving economic conditions to lead to more stable volumes later in 2026, with better results sporadically in some months being driven by selected major public sector projects.