Building consents for new residences have fallen to a five-year low as a slowing economy and high costs knock demand.
Stats NZ said consents for June were down 14 percent on May, and about 24 percent on a year ago driven by a slump in apartments, town houses, and retirement village units.
"The number of both apartments and retirement village units consented in the year ended June 2024 is the lowest in the last nine years," Stats NZ construction and property statistics manager Michael Heslop said.
The annual number of consents has fallen from a peak of 51,000 in mid-2022 to 33,600 in the year ended June.
The sharpest declines occurred across the country but most pronounced in Auckland down 27 percent, Wellington down 36 percent, and Canterbury down 16 percent.
The business and commercial sector also showed weaker activity with consents down nearly 10 percent with fewer health facilities and offices.
Westpac senior economist Satish Ranchhod said the size of the fall probably overstated the extent of the downturn in the sector, but it still reflected the current conditions in the house building sector.
"In addition to the large build cost increases in recent years, we still have high interest rates," Ranchhod said.
"At the same time, house sales remain muted and house price growth has stalled. Against that backdrop, prospective buyers are sitting on the side lines and developers are reluctant to bring new projects to market."
The sector had been doing better than the falling number of consents would imply because firms had been working through a pipeline of work, Ranchhod said.
"However, with consent issuance continuing to trend down, building activity is likely to continue softening well into the New Year."
Commercial building work was also slowing, with $9.6 billion worth of work completed and a notable fall in health facilities and offices, as developers were cautious about significant capital expenditure, Ranchhod said.
