Building Consents Issued
Building Consents Issued
Building Consents, Consents
Statistics New Zealand
The building consents issued release summarises information for building consents issued within New Zealand during each reference month. Values include Goods and Services Tax (GST) and are not inflation adjusted. From September 1989, consents below $5,000 are excluded.
The information release contains statistics on consents for residential and non-residential buildings by region and building type. It includes the number, value and floor area of new residential dwellings, and the value of consents for residential alterations and additions. It also includes the value of consents for non-residential buildings, and the floor area of new non-residential buildings. We classify buildings according to their main intended function. Subsequent changes in function will be recorded in the statistics if new consents are issued. Territorial authorities issue building consents.
Building consents data reflect an intention to build, and is seen as a indicator of confidence in the domestic economy. Building consents is also an early indicator of building activity, estimated in the quarterly release, Value of Building Work Put in Place.
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.
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.
Internal - National Accounts
External - Commercial Banks, Reserve Bank, Treasury, Bureau of Economic Research Limited (BERL), NZ Institute of Economic Research (NZIER)
Current methodology - Building Consents Issued from March 2015
We only include construction work that requires a building consent in these statistics. Some civil engineering works, such as roads, require resource consents but not building consents, so are excluded.
The Building Act 2004 determines the scope of work requiring a building consent. Its main parts came into force in 2005, replacing the building Act 2001. The 2004 Act introduced measures to provide greater assurances to consumers, such as registration of building consent authorities, and the licensing of building practitioners. The Act was reviewed in 2009. The review broadened the scope of work that may proceed without a building consent.
See Exemptions for changes to the Building Act 2004 and building work that does not require a building consent, on the Ministry of Business Innovation and Employment's website, third edition published 1 March 2014. ISBN:978-0-478-41705-0
The Canterbury Earthquake Recovery Authority has legislative power to undertake work without a building consent. For example demolition work, and temporary repairs.
We exclude consents that are predominantly for demolition work, and consents valued below $5,000.
The building consent value excludes the land value.
Seasonally adjusted series
Seasonal adjustment removes the estimated effect of regular seasonal events, such as summer holidays and pre-Christmas purchasing, from statistical series. This makes figures for adjacent periods more comparable.
The seasonally adjusted series are re-estimated monthly when each new month's data becomes available. Figures are therefore subject to revisions, with the largest changes normally occurring in the latest months.
We use the X-13 ARIMA-SEATS seasonal adjustment program, developed at the US Census Bureau, to produce the seasonally adjusted and trend estimates.
Trend estimation removes the estimated effect of regular seasonal events and irregular short-term variation from statistical series. This reveals turning points and the underlying direction of movement over time.
The trend series are re-estimated monthly when each new month's data becomes available. Figures are therefore subject to revision, with the largest changes normally occurring in the latest months. Revisions can be large if values are initially treated as outliers but are later found to be part of the underlying trend.
We use the X-13 ARIMA-SEATS seasonal adjustment program to produce the seasonally adjusted and trend estimates. Irregular and short-term variation is removed by smoothing the seasonally adjusted series using optimal weighted moving averages.
To reduce distortions, we estimate the monthly and quarterly trend series for the value of non-residential buildings after removing consent values of $100 million or more from January 2006, and $25 million or more before 2006. However, monthly non-residential building consent values are still volatile with no stable seasonal pattern, and therefore a stable trend for the monthly series is slow to emerge.
Seasonal adjustment at Statistics New Zealand has more information.
Interpreting the data
Values for new buildings include conversion costs. For example, if a hotel is converted to apartments, we treat them 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. We collect value data at each stage but floor areas and dwelling or building counts are normally recorded at the first large stage. The difference in timing can affect calculations of average prices.
Care should be taken in using building consents data for individual building types at small geographic areas, as it may contain errors and omissions that are not significant at the national level. We may not have detected these errors during our editing processes.
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, which are not accounted for in a standard seasonal adjustment.
Some of the apparent movement in building consent statistics is due to trading day differences between months. For example, a month with four weekends has 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.
We quantify and remove trading day effects (including Easter) when they are estimated to be statistically significant.
Trend estimates versus month-on-month comparisons
Trend estimates reveal the underlying direction of movement in statistical series. In contrast, comparisons of 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.
Until February 2015, all building consents were manually coded.
From March 2015 to August 2018 we used an automated rule-based process to classify building consents.
In the September 2018 release, we moved to a machine learning approach for automatically classifying building consents. We use a generalised linear model to decide how to classify each consent based on available information (eg the presence or absence of specific words and phrases in the consent's job description). The model is trained using manually coded data, and refined over time.
After the building consents data has been automatically coded, we manually check higher value and unusual consents to validate the data.
The variables that are automatically coded are building nature, building type, unit count, institutional sector, and institutional control.
New dwellings consented per 1000 residents
The annual number of new dwellings consented per 1000 residents are available monthly by region, territorial authority, and Auckland local board areas. National dwelling numbers per 1000 residents after December 1991 will use quarterly population estimates, using the latest available quarterly estimates (DPEA.SG2CTOTM). When dwelling numbers are published before the relevant quarterly population estimate, the new dwellings consented per 1000 residents calculation will revert to using the previous quarter's estimate. This will be recalculated with the newest quarterly population estimate once it is available. National dwelling numbers before December 1991 will use annual population estimates, given for each December year (DPEA.SA2CTOTD).
For dwellings consented per 1000 residents at the regional, territorial authority, and Auckland local board level, annual estimates are produced using the appropriate sub-national annual population estimates (as at June). Similar to the national estimates, this will involve using the population estimates with the same reference year as the year-ended annual dwelling counts. Regional estimates are based on the population series DPEA.SFR&, territorial estimates DPEA.SF[IJKLMNOP]&, and Auckland local board areas DPEA.SJS& (where & is the region, territorial authority, or Auckland local board area code).
The survey has 100 percent coverage of the target population so there is no sampling or sample error.
Non-sample errors can occur when there is incomplete or incorrect information on consent forms, or when information is incorrectly delivered, interpreted, or classified (including automatically coded building consents). While we make much effort to minimise these errors, they will still occur, and we cannot quantify their effect.
September 2017 seasonal adjustment and trend changes to building consents issued
We have improved the way we calculate the seasonally adjusted and trend series in building consents issued. These changes were introduced in the September 2017 release (published on 31 October 2017).
Changes to seasonally adjusted series
All seasonally adjusted series now include an adjustment for the timing of Easter. This accounts for when Easter moves between March and April.
This change also helps the seasonal adjustment algorithm to better calculate the seasonal pattern for other parts of the year. This means that seasonally adjusted movements throughout the time series have been affected by the new methodology.
This change reduces the volatility of most of our seasonally adjusted series.
The monthly seasonally adjusted series affected by this change are:
number of new dwellings consented (shown in the graph below)
number of new houses consented
value of consents for all buildings
value of consents for residential buildings.
The quarterly seasonally adjusted series affected by this change are:
number of new dwellings consented
number of new houses consented
value of consents for all buildings
value of consents for residential buildings
value of consents for non-residential buildings (shown in the graph below).
Changes to non-residential trends
We have changed the way we treat outliers in the trends for the value of building consents for non-residential buildings.
Previously the monthly trend excluded consents with a value of $25 million or more before 2006, and a value of $50 million or more from 2006 onwards. Now it excludes consents with a value of $100 million or more from 2006 onwards. The methodology before 2006 is unchanged.
Previously, outliers were not excluded from the quarterly trend. For consistency, we are now excluding outliers from the quarterly trend. Before 2006, consents with a value of $25 million or more are excluded. From 2006 onwards, consents with a value of $100 million or more are excluded.
Building consents issued frequently asked questions
Building consents issued – frequently asked questions
Building consents issued data includes the number, floor area, and value of planned new dwellings, and the floor area and value of planned non-residential buildings. It also includes the value of alterations and additions to existing buildings.
Building consents data reflects an intention to build. The value of building work put in place estimates the value and volume of work put in place on construction jobs.
What geographic levels are available?
Auckland local board
Statistical area 2 (for number of new dwellings)
Meshblock (customised data requests only)
What does building consents data cover?
building consents issued with a value of at least $5000
estimated cost of building work including GST
floor area for new construction
building work that does not require a building consent
consents that are predominantly for demolition work
the cost of land
What are dwellings?
There are four dwelling types:
- Houses (stand-alone houses)
- Retirement village units
- Townhouses, flats, units, and other dwellings.
• Dwelling units is the total of all 4 types
• Apartments, townhouses, units, and other dwellings is a subtotal excluding houses, also referred to as multi-unit homes
• Sleepouts are generally not dwellings unless they are fully self-contained, including a kitchen and bathroom.
How do I find the number of new dwellings consented?
In Excel tables attached to monthly release Building consents issued - information releases Building consents issued: Mmm YYYY.xlsx:
Table 1 - NZ actual number by type, total floor area and value by month (25 months) and year ended (6 years)
Table 2 - Seasonally adjusted and trend by month (49 months)
Table 3 - actual number by region by month (25 months) and year ended (6 years)
Table 4 – trend for selected regions (21 months)
Table 5 - actual number by territorial authority or Auckland local board by month (13 months) and year ended (6 years)
What is the new dwellings number?
We publish the number of new dwelling units consented, not the number of consents for new dwellings.
The number of consents is usually lower than the number of new dwelling units, as some consents are for more than one new dwelling
• For stand-alone houses there is usually one consent per new dwelling.
• For complex projects such as apartment buildings and retirement village units, there are often several building consents (stages) for the project, issued across more than one month.
• For staged projects we capture the value at each consent stage, but only count the floor area and number of new dwelling units once (often at the first large stage).
For new plus altered, why is there no number or floor area?
• We don’t sum the new number (of units), with the altered number (of consents) as they are different measures. And there is no floor area data for alterations and additions.
• For new construction there is number of units, value, and floor area. The number of new residential units equals the number of new dwellings.
• For altered construction, there is value and number. The number is the number of consents, not the number of units. We don’t capture floor area for alterations and additions.
How are new dwelling averages calculated?
Use year ended (annual) data to calculate average values, price per square metre, and average size of new dwellings, as monthly statistics can be volatile. Also note that the types of new dwellings consented varies by area, with a higher proportion of multi-unit homes in urban areas, and of stand-alone houses outside of urban areas.
• the average value of new dwellings is the value divided by the number of units
• the average price per square metre (m2) for new dwellings is the value divided by the floor area
• the average size of new dwellings is the floor area divided by the number of units.
What is included in new dwelling floor area?
• any attached building such as a garage – around 36m2 for a standard double garage - is included in the floor area. This is partly why stand-alone houses tend to be larger than other dwelling types.
• for multi-unit homes such as apartments, any lobby, parking or other shared area is included in the floor area.
Why are there a lot of new dwellings in some areas?
• New subdivisions, apartment blocks, and transportable/ prefabricated dwellings increase the number of new dwellings in certain geographic areas.
• transportable/ prefabricated dwellings are counted where they are built (factory), not the destination - which may be in a different territorial authority area.
Can StatsNZ supply individual building consents data?
• StatsNZ does not supply individual building consents to any party except occasionally to the building consenting authority (BCA) that supplied it to us.
Previous methodology - Building Consents Issued to February 2015