Wellington, Jan 13: New Zealand saw 3,100 new homes consented in November 2024, up 4.8 per cent compared with November 2023, the country's statistics department Stats NZ revealed on Monday.
Key Points
1.
New home consents up 4.8% with multi-unit homes growing 14%
2.
Annual consents down 12% from previous year
3.
Housing market shows resilience despite economic challenges
Among the new homes consented, there were 1,402 stand-alone houses, down 4.1 percent compared with November 2023, and 1,698 multi-unit homes, up 14 percent over the same period, Stats NZ said. Multi-unit homes include townhouses, apartments, retirement village units, and flats. "While the number of homes consented each month has fluctuated, the trend has remained relatively steady for the last year," Stats NZ economic indicators spokesperson Michael Heslop said. He added that the number of new homes consented in November 2024 rose 5.3 percent compared with October 2024, excluding seasonal effects.
The number of new stand-alone houses consented fell 0.7 percent in November 2024, following a 6.3 percent fall in October 2024, he said, according to Xinhua news agency. Annually, the number of new homes consented was 33,609 in New Zealand in the year ended November 2024, down 12 percent compared with the year ended November 2023. Heslop noted that the annual number of homes consented has been sitting around the 33,600 mark for the last six months, which was down from a peak of 51,015 in the year ended May 2022.
Last October, the Reserve Bank of New Zealand stated that New Zealand households continue to show resilience following significant price rises and falls seen over the last four years. Housing market activity is currently subdued, with interest rates still at elevated levels. "House prices remain a stretch for many prospective buyers and are hovering around the top of our estimate of sustainable levels. Banks are currently facing competitive pressures to attract a limited pool of creditworthy borrowers," said the bank's Director of Financial Stability Assessment and Strategy, Kerry Watt.
Borrowers' capacity to take on more debt is increasing as monetary policy is eased. However, the weaker economic environment means households are exercising caution. Watt added that the level of interest rates is still high by recent standards and lending growth has been low over the past year. It is uncertain when and how much demand for new borrowing will pick up.
Residential property makes up over half of New Zealand households' wealth, and the housing market directly influences financial stability, affects consumer confidence, and shapes economic growth, according to a bank statement. Understanding the dynamics of the housing market is crucial for the bank, as home loans account for more than 60 percent of total bank lending. "Ensuring that we remain vigilant in monitoring these trends and market dynamics is essential for safeguarding the financial system and broader economy," Watt said.
He added that government policy changes are underway to increase long-term supply responsiveness in the housing market. Better supply responses to housing demand will help moderate future house price cycles and improve housing affordability. Watt also noted that debt-to-income restrictions will play an important role in moderating demand cycles and reducing the buildup of risks.
