NZ building consents sink 8.2% in January as Canterbury drops off

Monday 29th February 2016

New Zealand building consents fell last month as a drop-off in Canterbury construction intentions offset growth in other regions, although Auckland continued to lag behind the estimated level needed to match growth in housing demand.

Seasonally adjusted consents across all dwellings dropped 8.2 percent to 2,245 in January, while housing consents sank 5.6 percent to 1,646, its steepest decline since August 2014, according to Statistics New Zealand. On an unadjusted basis, new housing consents were 13 percent higher than a year earlier at 1,286, helping offset a 24 percent drop in apartment permits to 89 and a 42 percent slump in townhouses, flats, and units intentions to 185. On an annual basis, new housing consents were up 5.7 percent to 19,183, with all dwellings up 9.5 percent to 27,124.

Consents in Canterbury dropped 38 percent to 289 in January from a year earlier, while Auckland permits were up 5 percent at 506 in the month. On an annual basis, Auckland consents were at 9,275, still behind the 13,000 the city is estimated to need to match population growth.

"This was not unexpected after three consecutive months of strong growth in consent numbers led by Auckland and a December figure that was surprisingly strong in Canterbury, where residential rebuilding is winding down," Westpac Banking Corp industry economist David Norman said in a note. "A correction in Canterbury was expected, but the scale of the fall was surprising."

Today's data also showed a pick-up in consents in Waikato and Bay of Plenty, with permits up 45 percent and 40 percent respectively. The two areas that have been beneficiaries of investor demand since the Reserve Bank imposed tougher lending restrictions on investment properties last year.

The value of non-residential building consents fell 12 percent to $310 million, for an annual increase of 14 percent to $5.88 billion. Education buildings are leading gains in non-residential work, up 66 percent on the year to $1.14 billion, and second in annual value behind offices, administration, and public transport, worth $1.24 billion.

The value of all buildings rose 6.9 percent to $1.07 billion in the month, and increased 14 percent to $16.51 billion in the year.

BusinessDesk.co.nz

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