March 4, 2025 • 4 mins
The coalition Government wants more homes to be built cheaper and faster, yet official data shows an annual 7.2 percent drop in the sector.
New data from Stats NZ shows that in the year ended January 2025, there were 33,812 new homes consented, down 7.2 percent compared with the year ended January 2024.
Infometrics Principal Economist Brad Olsen explains further.
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Speaker 1 (00:00):
Signs of a gradual turnaround in the building sector. New
stats and Z figures out today. They show new home
building consents down seven point two percent annually to January,
but eleven percent more homes were concented that month compared
to the year before. Brad Olson's the infometric CEO. He's
with us Hi Brad good evening. So what are we
making of this?
Speaker 2 (00:20):
Well, look, I think the fact that you're seeing on
a sort of looking at the January month compared to
where it was a year ago, you've seeing a bit
of a tick up. There's definitely a bit of a
shift coming through, and it reinforces our view looking through
in these figures that actually there's effectively a bit of
a stabilization starting to come through. Yes, overall over the
last twelve months the number of consents are lower than
(00:43):
the twelve months before that, but that's because we had
seen sort of such a big pullback, but realistically down
seven point two on the annual basis over the last
twelve months. At one point it was down something like
twenty five percent. So we're starting to see that shift
gradually emerging. What I think was int thing when we
dug through into the numbers was the fact that you've
got quite a strong drive in recent times coming through
(01:05):
from Canterbury and Otago, some of the biggest contributions from
those areas, and also a bit of a notch upwards
in townhouse consent. So again, look, the numbers are still
in a more challenging spot. But after the construction's gone
from what fifty one thousand consents going back a couple
of years now we're thinking things stabilize more around the
(01:26):
thirty three to thirty five thousand marks, so down but
also not out interesting.
Speaker 1 (01:30):
That the average floor area for a standalone house was
one hundred and seventy six square meters. That's down from
one hundred and eighty three the year before and the
lowest for any year into January since nineteen ninety four.
Is that part of the townhouse thing?
Speaker 2 (01:46):
No, I mean those were the standalone figures themselves. So
you know that's a that's a that's a detached dwelling,
right if you will. But you're right, I mean, look
at it. It's notable that those that effectively your house
areas becoming smaller. Maybe we've all got to the Marie
condo and now we can sort of exist with a
small amount of space realistically, of course, it's actually because
people have been paying so much for houses that we
(02:09):
are looking for those sort of smaller options. And I
think it's also interesting like building consents in the size
of the floor area often dictates or is dictated by
what people are looking to buy. Now. Yes, people might
be feeling forced to buy smaller and build smaller because
of the financial restraints, but it also suggests that, you know,
because we have gotten more used to some of the
(02:30):
denser dwelling in townhouses and apartments, obviously there's a bit
of a shift where kiwis are able to make that
work a bit better and be a bit more affordable
than before. So definitely a bit of a shift coming
through there. In terms of the land size. People are
going to have to get pretty good at where they
store stuff.
Speaker 1 (02:47):
Yeah, that's one of the troubles that I have at
my place because our place is tiny. But the thing
is you do get used to it. And also not
having a big backyard. I think everybody wants a big backyard,
but then once you live without one, you kind of
realize you can without it.
Speaker 2 (03:01):
Well, until you've got a lawn and trees that have
got to be looked after a ride. You know, it's
great in summer and then it sort of becomes a
bit unkempt and hard to look after. I think as well,
when it comes to space, the more space you have,
the more space you can fill up. Like I feel
like your collection of clutter can sometimes grow to fill
whatever you've got. Now. Like I say, I do think
that actually the driving force behind this is more around
(03:23):
affordability and what kiwis are able to pay when it
comes to housing, and so that's obviously a challenge. But
I do think as well it reflects the fact that
over time we have seen a real shift in how
Kewis are living. I mean the fact that you know,
people are buying in different groups. It's not just sort
of a couple anymore. You know that there's different sort
of formations of who's buying a house, what people need
(03:45):
in them. The fact that you sort of you don't
necessarily need a spare bedroom anymore, you need an office
space that maybe has a pull out couch for when
mates come over. Like the entire way that New Zealander
is a living is shifting, and I think that's what
these numbers are reflecting as.
Speaker 1 (03:58):
Well interesting South Brad, Thank you for that. Brad Olsen,
who's the informatric CEO. For more from Hither Duplessy Allen Drive,
listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
Signs of a gradual turnaround in the building sector. New
stats and Z figures out today. They show new home
building consents down seven point two percent annually to January,
but eleven percent more homes were concented that month compared
to the year before. Brad Olson's the infometric CEO. He's
with us Hi Brad good evening. So what are we
making of this?
Speaker 2 (00:20):
Well, look, I think the fact that you're seeing on
a sort of looking at the January month compared to
where it was a year ago, you've seeing a bit
of a tick up. There's definitely a bit of a
shift coming through, and it reinforces our view looking through
in these figures that actually there's effectively a bit of
a stabilization starting to come through. Yes, overall over the
last twelve months the number of consents are lower than
(00:43):
the twelve months before that, but that's because we had
seen sort of such a big pullback, but realistically down
seven point two on the annual basis over the last
twelve months. At one point it was down something like
twenty five percent. So we're starting to see that shift
gradually emerging. What I think was int thing when we
dug through into the numbers was the fact that you've
got quite a strong drive in recent times coming through
(01:05):
from Canterbury and Otago, some of the biggest contributions from
those areas, and also a bit of a notch upwards
in townhouse consent. So again, look, the numbers are still
in a more challenging spot. But after the construction's gone
from what fifty one thousand consents going back a couple
of years now we're thinking things stabilize more around the
(01:26):
thirty three to thirty five thousand marks, so down but
also not out interesting.
Speaker 1 (01:30):
That the average floor area for a standalone house was
one hundred and seventy six square meters. That's down from
one hundred and eighty three the year before and the
lowest for any year into January since nineteen ninety four.
Is that part of the townhouse thing?
Speaker 2 (01:46):
No, I mean those were the standalone figures themselves. So
you know that's a that's a that's a detached dwelling,
right if you will. But you're right, I mean, look
at it. It's notable that those that effectively your house
areas becoming smaller. Maybe we've all got to the Marie
condo and now we can sort of exist with a
small amount of space realistically, of course, it's actually because
people have been paying so much for houses that we
(02:09):
are looking for those sort of smaller options. And I
think it's also interesting like building consents in the size
of the floor area often dictates or is dictated by
what people are looking to buy. Now. Yes, people might
be feeling forced to buy smaller and build smaller because
of the financial restraints, but it also suggests that, you know,
because we have gotten more used to some of the
(02:30):
denser dwelling in townhouses and apartments, obviously there's a bit
of a shift where kiwis are able to make that
work a bit better and be a bit more affordable
than before. So definitely a bit of a shift coming
through there. In terms of the land size. People are
going to have to get pretty good at where they
store stuff.
Speaker 1 (02:47):
Yeah, that's one of the troubles that I have at
my place because our place is tiny. But the thing
is you do get used to it. And also not
having a big backyard. I think everybody wants a big backyard,
but then once you live without one, you kind of
realize you can without it.
Speaker 2 (03:01):
Well, until you've got a lawn and trees that have
got to be looked after a ride. You know, it's
great in summer and then it sort of becomes a
bit unkempt and hard to look after. I think as well,
when it comes to space, the more space you have,
the more space you can fill up. Like I feel
like your collection of clutter can sometimes grow to fill
whatever you've got. Now. Like I say, I do think
that actually the driving force behind this is more around
(03:23):
affordability and what kiwis are able to pay when it
comes to housing, and so that's obviously a challenge. But
I do think as well it reflects the fact that
over time we have seen a real shift in how
Kewis are living. I mean the fact that you know,
people are buying in different groups. It's not just sort
of a couple anymore. You know that there's different sort
of formations of who's buying a house, what people need
(03:45):
in them. The fact that you sort of you don't
necessarily need a spare bedroom anymore, you need an office
space that maybe has a pull out couch for when
mates come over. Like the entire way that New Zealander
is a living is shifting, and I think that's what
these numbers are reflecting as.
Speaker 1 (03:58):
Well interesting South Brad, Thank you for that. Brad Olsen,
who's the informatric CEO. For more from Hither Duplessy Allen Drive,
listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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