Dunedin had 525 dwellings consented in the year to February 2023, compared with 562 in the previous 12 months.
The number of consents issued for new dwellings in Dunedin peaked in June last year and had been dropping since, but remained well above the city’s 10-year average, a Dunedin City Council (DCC) spokesman said.
Prominent developer Allan Dippie said economic conditions had made projects a little less viable.
"But we still need to be building houses over time," he said.
"Demand for housing is still there."
Property prices, interest rates, construction costs and confidence in the economy are some factors that influence consent numbers, as well as demand for more housing.
Monthly consent figures compiled by Statistics New Zealand showed a sharp drop in Otago and Canterbury recently.
Consents issued for multi-unit homes in Otago went as high as 131 in February last year and fell to 46 in February this year.
For houses, the comparison was 110 in February 2022, against 82 in February this year.
Nationally, the drop was 29.2%.
Mr Dippie was wary of monthly statistics, which tend to be more volatile.
However, it was clear there had been a dip and he said it could take longer to come out of than people might expect.
"These things take a bit of time to work through."
Blue Sky Property Group director Lyndon Fairbairn agreed there was an underlying need to get more houses into the market.
Significant commercial and government construction was happening in the city through projects such as redeveloping the Hillside railway workshops and building the city’s new hospital and ACC offices.
"Building companies bring in people, but it is difficult to house them," Mr Fairbairn said.
The investor market had slowed, he said.
Insulation regulations had added to project costs.
In July last year, the Ministry of Business, Innovation and Employment extended the time to comply with new wall, floor and roof insulation requirements in new homes and they now start in May. The extension applied to housing only.
The regulations came in for commercial buildings, communal residential and communal non-residential projects in November.
Mr Fairbairn expected activity in the house-building market might pick up after this year’s general election.
The pipeline of work was continuing for his firm.
The city would have to pick up the pace to meet a DCC goal for the decade to 2030 of 4400 additional dwellings, he said.
Council city development manager Dr Anna Johnson said earlier this year Dunedin was poised to have comfortably enough housing capacity to cover a population scenario of medium growth and the city would also be prepared if higher growth were to happen.
