From building consent to building activity

Building consent numbers show an intent to build but we know that not all building consents translate into actual building activity.  While the majority of consents do convert into real buildings, for various reasons some do not result in a project proceeding.  Additionally, the time lag between the granting of consents and building commencement is equally a significant factor in identifying building activity.

With this in mind we set out to see what information is available that shows the amount of building activity and what time lag there is between the granting of a building consent and the commencement of construction.

Statistics NZ has been working on a series to show the time taken between the granting of building consents and the conduct of key milestones such as first inspection, final inspection and issue of code compliance certificate. This experimental series is still being developed in terms of a refinement of data received from building authorities and scope and participation rate of building authorities.

The information is however useful in terms of providing a picture of actual building activity as distinct from indications of intent to build.

This table covers the four years from September 2019 to September 2023.  It shows the median number of days taken between the granting of a building consent to the date of the first building inspection (usually the inspection of the foundation), for all buildings, houses, multi-unit developments such as apartments and townhouses and for residential alterations.

Observations;

1                    from late 2021 the time taken between consent and first inspection rose sharply across all categories, likely due to rising interest rates and tightening economic conditions impacting on decisions to commence construction.

2                    the time taken remained high through 2022 and the first half of 2023 but looks to have fallen in late 2023.  We’re not sure why the fall in late 2023, interest rates didn’t start to fall until 2024 but dwelling consent numbers were falling from 2022 through to 2023 and into 2024 and that may have impacted issues such as material availability and other logistical factors.

3                    multi-unit developments take a longer time between consent and first inspection probably because they are larger projects involving greater complexity than single projects or alterations.

Unfortunately Stats NZ has no recent data and no indication that this experimental series will proceed in the near future.  We hope that they will decide to continue the series and establish it as a permanent programme.

We have however been able to source information from Auckland Council.  Their data shows the time taken between consent issued and date of first inspection for residential constructions peaked at 171 days in the September 2024 quarter and has since fallen to 129 days in March 2025 quarter.

For members this information will provide a good guide to actual building activity that will take place following building consent statistics.  Generally, at the moment it seems that half of consented residential buildings will get underway less than 114 days later.  Bear in mind that the 114 days is date of first inspection so actual activity will have commenced perhaps two or three weeks prior to inspection.  Note though that the Stats NZ experimental series shows that the number of days to first inspection for the lower quartile of consents is around one third to half the number of days for the median and that the number of days for the upper quartile is around two to three times the median.  Nevertheless, this information will give members a better gauge about product demand trends rather than relying on only building consent numbers.