New housing slides but do ups, extensions hold up

Photo / Paul Estcourt

The number of new houses and flats being built nationwide has fallen to its lowest level in decades but the residential additions and alterations market is holding up strongly.

Statistics NZ yesterday said 14,611 dwellings were built in the March year, down on last year's 15,381 dwellings.

But people are still forking out on their places: additions and alterations spending climbed from $990 million in 2006 year to $1.015 billion, steady at $1 billion-plus annually during the past six years.

Goldman Sachs economist Philip Borkin said the additions and alterations market showed mixed levels of activity.

"As a proportion of total residential consents, the value of alterations and additions has certainly been rising of late," Borkin said. "However, that is more a reflection of depressed new building activity rather than a pick-up in alterations and addition work itself.

"In fact, alterations and additions work has actually begun to ease over the past few months."

Statistics NZ said new dwelling authorisations fell steadily since last April to its lowest level since the series began in 1982.

"The seasonally adjusted number of new dwellings authorised, including apartments, rose 2.2 per cent in March, following a 9.8 per cent fall in February. The unadjusted value of residential building consents fell $108 million (20 per cent), while non-residential building consents fell $1 million (0.2 per cent), compared with March 2010."

The three regions with the largest decreases were Canterbury, down 161 units to 166, Waikato, down 78 units to 127, and Otago, down 41 units to 59.

"In the March 2011 month, the value of consents issued for all buildings was $764 million, down 12 per cent compared with March 2010."

The value of non-residential building consents was $3.7 billion in the year to in March, down 14 per cent from the year to in March last year.

Seven of the 11 building types recorded decreases in value.

Borkin said the non-residential construction sector results were better than expected over recent months.

The Christchurch rebuild would also push up numbers and the new-house market would improve slightly.

"Outside of the Canterbury region, with housing turnover improving, mortgage rates supportive and demographic pressures - particularly in Auckland - now appearing to be emerging, we believe the trough in consent issuance is likely to have been reached, or very close to being reached," he said.

"We believe consent issuance will trend higher over the rest of 2011."