Tommy Honey: Construction Industry Council ED on the drop in building consents

There's a belief New Zealand's building sector is still many months away from a rebound, as consents plummet. 

Stats NZ data shows fewer than 34,000 new homes were consented in the year to June. 

That's a 24% annual drop, and five-year low. 

Construction Industry Council Executive Director Tommy Honey told Ryan Bridge it's a continuation of a trend that began mid-2022 

He says they've been waiting for that to reverse —or at least plateau— but numbers are still seemingly sinking. 

Annual building consents of apartments have also plummeted, with a 51% drop in the year to June.  

Honey told Bridge apartments are seen as a risk for builders, developers, and investors. 

He says it's also related to inflation running high, and while that's turning a corner, there's a lag at the Reserve Bank. 

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Episode Transcript

Speaker 1 (00:00):
The number of new build consents issued in the year
to Joune has dropped to a five year low. Stats
and Z data shows just over fourteen thousand standalone houses
we're consented, that's down nineteen percent, and there was an
even larger drop in multi unit buildings, with just over
eighteen thousand approved that's down twenty eight percent. Joining me
in our Construction Industry Council Chief executive sorry executive director,

(00:23):
Tommy Honey, Hey, Tommy Marina, how are you?

Speaker 2 (00:26):
Yeah?

Speaker 1 (00:27):
Good, thank you, Good to have you on the show.
I just wanted to point out the apartments consents down
fifty percent. Yep, yep, that's big.

Speaker 2 (00:36):
So oh it is. And so what we've seen is
a continuation of sort of a downward trend that really
started in the middle of it's about June twenty twenty two,
so two years ago. And we have been like a
lot of people waiting for that kind of to reverse
or at least plant oh, but it seems like we're

(00:56):
still heading downwards. The thing about apartments is that for
the for the builders, developers, investors and those is that
they're quite a risk. And when you've got inflation running
as high as it has been and that's starting to
turn the corner, but the Reserve Bank is not. Actually
they haven't turned the corner yet, and there's a bit

(01:18):
of a lag there was, or there's always a lag
when when the mortgage rates and interest rates so very
slow to respond. So I still think we're three six
nine months away from any really great health. Coming back
to the bottom sector.

Speaker 1 (01:34):
Who is building? I mean, obviously some houses are getting built.
Who is building them?

Speaker 2 (01:38):
Well, I think I think the people who've got the
winders all to do that, because you've got to think
all so the whole real estate state market of flat
So you're going to go building that. Yeah, if you've
got a house you live in and you want to
build a new one, sell the first one. Yeah, not
a guarantee that that's going to This is the right
time to be doing that, unless you're just looking a
little bit further into the future. One of the sort

(02:00):
of handbrakes on the whole system is that one of
our biggest builders or the biggest clients really has recently
in recent year has been the government through coying or order.
And because they put a pause on that, everyone that
works for them, which is builders, and because the government
itself is a builder. They have developers who have trades,

(02:21):
people in sub trades, and that whole part of the
sect has taken a real hit because the number of
houses that kyng Aura has been consenting getting built in
recent years has been around about ten to fifteen percent
of all the houses. So the other that nineteen percent drop,
a good portion of that is actually due to coying
or and not building starting any new projects. They're finishing

(02:42):
off a few projects, but they put a pause and
a whole.

Speaker 1 (02:44):
Lot and that a perfect storm.

Speaker 2 (02:47):
Oh yeah, it happens. Confidence right through all the way.
And this whole a whole set depends on confidence and certainty,
and there's so much uncertainty around with what the government's doing.
When they've got plans, we wanted to see them happen
a lot quicker the economy, who are interest rates and
then everyone who wants to spend the money sitting back

(03:08):
and saying, oh, we'll just wait, so we're Yeah, perfect
storms are the right way to describe it.

Speaker 1 (03:12):
Tommy, thanks so much for your time. That's Tommy Honey.
He's the executive director at the Construction Industry Council.

Speaker 2 (03:19):
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