Dwelling consents issued

IBISWorld forecasts the number of dwelling consents issued to jump by 13.2% in 2025-26, to a total of 38,562 units. Through the first three quarters of 2025-26, dwelling consents issued are 9.9% up on the same period 12 months prior. This rebound in dwelling consents issued has been driven by expansionary monetary policy, with the RBNZ having slashed the Official Cash Rate (OCR) by 175 basis points over a series of cuts during the financial year. These cuts have placed upwards pressure on mortgage affordability for New Zealanders as average residential housing loan rates have declined, allowing increased private investment in new housing.

The initial lockdown period significantly boosted the New Zealand household savings rate throughout 2020 and 2021, enabling more New Zealanders to accumulate deposits for housing. This trend drove a significant increase in the demand for new dwellings in 2021-22, with new dwelling consents jumping by 24.2% compared to 2020-21. Residential housing prices in Auckland and Wellington skyrocketed over the period, sparking robust construction activity and leading to record numbers of dwelling consents issued. Additionally, low interest rates heightened investor appetite for residential real estate, as financing became relatively inexpensive, bolstering construction activity and the issuance of dwelling consents.

In 2022-23, the number of dwelling consents issued dropped compared to the peak of 2021-22 but remained the second most active year of all time for New Zealand's residential construction sector. The RBNZ also engaged with contractionary monetary policy to combat post-pandemic inflation, which placed downwards pressure on investment in new dwelling construction throughout the year. The OCR remained elevated throughout 2023-24, resulting in a sharp pullback in new dwelling constructions, as the mortgage affordability index reached an all-time low. Despite a series of cuts to the OCR in the back half of 2024-25, the number of dwelling consents issued continued to decline, with the annual figure dipping to just over 34,000 (over 33.0% down on peak figures in 2021-22).

While dwelling consents issued have fallen between 2022-23 and 2024-25, government policies surrounding the housing supply shortfall in New Zealand have limited further declines. Multiple initiatives like the Residential Development Underwrite program developed by the New Zealand Government (Te Kawanatanga o Aotearoa) have sought to address the housing shortage, placing some upwards pressure on dwelling consents issued. Overall, IBISWorld forecasts the number of dwelling consents issued to fall at a compound annual rate of 1.2% over the five years through 2025-26.