The government wants to reinvigorate the industry as it tries to revive economic growth

Published Mon, Sep 1, 2025 · 10:07 AM

[WELLINGTON] New Zealand home-building approvals remain in a slumber that extends back more than a year, adding to signs that weakness in the key construction industry may persist.

There were 33,879 consents issued in the 12 months to July, Statistics New Zealand said on Monday (Sep 1). That’s the 15th straight month that the annual total has been below 35,000.

Construction has failed to stir even as the Reserve Bank of New Zealand (RBNZ) cut its Official Cash Rate by 250 basis points since August last year. Worries about job security and a sluggish economic recovery have pushed potential home builders to the sidelines, while global economic uncertainty has hurt investor sentiment and curbed new residential developments.

Construction contracted 9.3 per cent in the 12 months to March, costing jobs and forcing some firms to close. Concrete production in the 12 months to June was the lowest in more than 10 years.

The government wants to reinvigorate the industry as it tries to revive economic growth and has unveiled a range of regulatory adjustments aimed at smoothing approval processes and making it cheaper to get a house built.

The sector may also get a lift if the RBNZ reduces borrowing costs further after it signalled on Aug 20 that there may be another 50 basis points of cuts to come before Christmas.

Weakness in the underlying housing market also hampers the construction sector by making apartments and retirement village units less attractive for those who may want to downsize from a family home. House prices fell for the fourth straight month in July.

Today’s report showed 1,483 retirement units approved in the 12 months to July, down 16 per cent on the previous year. Apartment consents rose 26 per cent to 2,270 in the year to July, but that followed a 56 per cent slump in the period to July 2024. BLOOMBERG

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