Building consents stall, Auckland falls

BusinessDesk

30 Jun, 2015 01:41 AM3 mins to read

Building consents for Auckland homes rose in June to 704 from 599.

New Zealand building consents were virtually static in May as dwindling demand in Auckland offset increased construction intentions in other parts of the country.

Seasonally adjusted consents for all dwelling types was little changed at 2,151 in May, from 2,150 in April, according to Statistics New Zealand. Housing consents rose 2.4 per cent to 1,520, following a 1.8 per cent decline in April.

On an unadjusted basis, new dwelling consents rose 2.2 per cent to 2,171 in May from the same month a year earlier, though new housing consents dropped 5.8 per cent to 1,587. Apartment consents retreated from a seven-year high, falling 21 per cent to 115 in May from the year earlier. New consents for retirement village units rose 45 per cent to 184, while permits for townhouses, flats and units jumped 71 per cent to 285.

New dwelling consents in Auckland, New Zealand most populous city, fell for the first time since January, down 29 per cent in the month of May to 651.

"A pullback in consents in Auckland was offset by gains in the rest of the country," Westpac Bank economist Michael Gordon said in a note. "The main driver of the Auckland figures was a drop in the multiples category (apartments, townhouses and units). That's no real cause for concern, as this category is quite volatile and the April total was the second-highest in the last decade."

Today's data shows consents fell on a monthly basis in three out of the country's 16 regions, with Hawkes Bay and Nelson declining, while consents on West Coast were static. Wellington consents increased 25 per cent to 150 last month, while Canterbury consents rose 29 per cent to 549.

...the centre of gravity in the homebuilding industry is clearly shifting from Canterbury to Auckland.
Westpac Bank economist Michael Gordon

The New Zealand building industry has been stretched to keep up with demand in Canterbury, where the country's second-largest city is recovering from a series of devastating earthquakes, and in Auckland, where a shortage of supply has pushed real estate prices to record levels and seen a resurgence in new home builds.

"Notwithstanding the latest monthly figures, the centre of gravity in the homebuilding industry is clearly shifting from Canterbury to Auckland," Westpac's Gordon said. "The residential side of the post-quake rebuild is now well advanced, while Auckland still requires a further lift in building activity to meet population growth."

On an annual basis, Auckland dwelling consents were up 6.5 per cent in May compared to the same month a year earlier, while Canterbury dwelling consents declined 9.3 per cent.

The value of residential building consents rose 3.3 per cent in the month of May to $714 million, while on an annual basis it increased 13 per cent to $8 billion.

The value of non-residential building permits rose 32 per cent to $486 million in the month of May. On an annual basis the value of non-residential building consents rose 22 per cent to $5.4 billion.