Citation Information

Coverage Information

Studies

Building Consents Issued Oct 2017

Significant events impacting this study series

Starting with the September 2018 release, we use improved automated coding techniques. A machine learning-based algorithm classifies each building consent's type, nature, sector, and control. However, people continue to oversee, review, and code significant or unusual building consents.

In the September 2017 release we altered our seasonally adjusted series to include an adjustment for Easter. This change affects the entire time series. We also increased the threshold for outliers in the monthly trend for the value of non-residential building consents from $50 million to $100 million (backdated to 2006), and adopted the same approach for the quarterly trend (previously, outliers were not excluded from the calculation of the quarterly trend).

In the March 2015 release we moved from manually coding each building consent to using an automated rule-based process to classify building consents. We then checked higher value and unusual consents to validate the data. This resulted in errors that were not significant at the national level.

From January 2011, Waikato region includes part of the former Franklin district that moved from the Auckland region.

On 1 November 2010, the new Auckland Council came into being. Before November 2010, the Auckland region can be used to approximate the new Auckland Council.

From March 2006 onwards, building consents in the former Banks Peninsula district are instead counted under Christchurch city.

On 31 March 2005, consent application fees were increased as a result of an increase in the Department of Building and Housing levy, along with new building requirements through the Building Act 2004. These changes apply to consents issued on or after 31 March 2005 and have contributed to the high number of consents issued prior to the changes, and fluctuation of consents numbers after the changes. Also, some Territorial Authorities noted delays in consent processing time after the introduction of the Building Act 2004.

In June 2004, the number of new dwellings was more than expected. Several Territorial Authorities increased their fees for the issuing of consents, effective 1 July 2004. This resulted in many applicants applying in June, where they might have otherwise applied in July. The effect was most prominent for Tauranga City. The fee increase was for residential consents only.

From June 1996, consent values for multi-purpose buildings are coded to one or more of the most appropriate building types. Before this date, multi-purpose buildings were classified separately.

From January 1993, building authorisations have been applied for under the building consents system administered by territorial authorities. Before this date, applications were made under the building permits system. The building consents system has wider coverage than the building permits system. The additional coverage includes some government building (particularly work on education buildings), and on-site drainage and reticulation work.

From September 1989, consents below $5,000 are excluded.

Frequency

2) Monthly

Usage and limitations of the data

Building consents reflect an intention to build. Building consents are seen as an indicator of confidence in the domestic economy, as building work requires the investment of capital.

Building consents is also an early indicator of building activity, estimated in the quarterly release, Value of Building Work Put in Place (QBAS).

The QBAS sample is drawn from building consents.

Building consents data includes GST and is not adjusted for inflation, whereas QBAS data excludes GST and some series are adjusted for inflation.

When a small number of consents have been issued for a region and they have a high value then the average dwelling value for that region is overstated.

There is no coverage of building consents issued for less than $5,000. This reduces the amount of data entry required by both territorial authorities and Statistics New Zealand, without significantly impacting on data quality.

Interpreting the data

Apartments - Apartment numbers often show large fluctuations from month to month and, unless removed from dwelling figures, can mask underlying movements. Previous series for apartments (discontinued in February 2015) were compiled from consents that had 10 or more new attached dwellings (flats or apartments). If there were fewer than 10 flats or apartments on a consent, they were treated as being dwellings other than apartments.

Values for new buildings include conversion costs. For example, if a hotel is converted to apartments, these are treated as new dwellings in the statistics.

Consent values for new buildings sometimes include the cost of demolishing or removing the previous buildings.

Some consents, particularly for large projects, are issued in stages across more than one month. Value data is collected at each stage but floor areas and dwelling or building counts are normally recorded at the first large stage of the project. This difference in timing can affect calculations of average prices.

Trading day adjustments

An aim of time series analysis is to identify movements that are due to actual changes. Seasonal adjustment is done to remove systematic calendar-related variation. Specific adjustments can be made to remove variations due to trading day differences and moving holidays, such as Easter, which are not accounted for in a standard seasonal adjustment.

Some of the apparent movement in building consent figures is due to trading day differences between months. For example, a month with four weekends will have more trading or working days than a comparable month with five weekends. This can affect monthly figures, even though there may be no difference in the length of the month or difference in the rate at which consents are issued. Trading day effects, when estimated to be statistically significant, are quantified and removed. This is trading day adjustment.

Trading day adjustments are made to the building consents series during the seasonal adjustment process, including an adjustment for the effect of Easter.

Trend estimates versus month-on-month comparisons

Trend estimates reveal the underlying direction of movement in statistical series. In contrast, comparisons of actual (unadjusted) data between one month and the same month in the previous year/s do not take account of data recorded for the intervening months, and are subject to one-off fluctuations. Reasons for fluctuations include changes in legislation, economic variables such as interest rates, and trading day composition of months.

Main users of the data

Internal - National Accounts

External - Commercial Banks, Reserve Bank, Treasury, Bureau of Economic Research Limited (BERL), NZ Institute of Economic Research (NZIER)