Downturn in building consent data

Auckland led the growth in building value. Photo / NZME

Consents were issued for nearly 28,000 new dwellings nationally in the March year, the highest since 2004 and nearly double the number three years ago.

But the latest monthly data showed a 10 per cent downturn in application numbers.

Statistics NZ information showed consents were issued for 27,789 new residential buildings in the year to March, 2016, up on last year's 25,048 but a huge rise on 2011' 14,611.

The trend for the number of new dwellings consented in Auckland recently reached its highest level since late 2004, but appears to have tailed off in the last few months, Statistics NZ said.

The trend for Waikato is at its highest level since mid-2007. The trend for Wellington appears to be decreasing while the trend for the rest of the North Island is at its highest level since early 2008. The trend for Canterbury has fallen 17 percent since the series peak in late 2014, but is still well above the historical average level. The trend for the rest of the South Island appears to be decreasing.

Last month, consents were issued nationally for 2315 new dwellings comprising 1815 houses, 334 townhouses, flats, and units, 134 retirement village units and 32 apartments.

"The seasonally adjusted number of new dwellings fell 9.8 percent, following a 10 per cent rise in February. The trend is showing signs of easing. For houses only, the seasonally adjusted number fell 4.1 percent, following a 3.9 per cent rise in February. The trend is flat," Statistics NZ said.

Jane Turner, ASB senior economist, said February consent rises were almost reversed last month.

"The trend in residential building consents appears to be moving sideways, rather than upwards. The lack of sustained growth is concerning, as New Zealand continues to under-build relative to population growth. In saying this, the weakness is very broad based, across consent type and region. There is the potential the early timing of Easter, combined with the Leap Year, may be complicating the usual seasonal adjustment and impacting consents issuance over recent months," Turner wrote.

"We are expecting residential building demand growth to re-accelerate over the coming year and will be looking for a pick up in the trend in consent issuance over coming months," she said.

David Norman, Westpac industry economist, said Auckland was performing strongly.

"The Auckland building consent direction remains strongly upward. Year-on-year growth in consent numbers is 20 per cent for Auckland. But nationally, consent growth is clearly being driven by Auckland; removing the largest city from the equation yields a fall of 9% in consent activity across the rest of the country as Canterbury comes off the boil and activity is subdued in dairying regions," Norman wrote.

"We expect there may be a relatively strong rebound in the Statistics New Zealand estimate of residential consents next month, again in part due to the effects of Easter, while non-residential consent values are expected to see steady growth of around 10 per cent year-on-year on an ongoing basis," he said.

National dwelling consents issued (years to March)
2011: 14,611
2012: 14,596
2013: 17,397
2014: 22,372
2015: 25,038
2016: 27,789
[Source: Statistics NZ]