New Zealand's residential building consents fell in December, mainly due to a drop in apartment consents.
Seasonally adjusted dwelling consents declined 7.2 per cent to 2,215 in December after falling 9.6 per cent in November, Statistics New Zealand said. Seasonally adjusted permits for new houses, however, rose 3.5 per cent to 1,696 following a 7.7 pe rcent slide in November.
Consents fell sharply on the month in Auckland to 740 versus 1,156 in November. Record net migration is putting pressure on the nation's housing market where a shortage of supply is pushing up prices in Auckland, the country's largest city, making accommodation unaffordable for many.
"The slowdown in Auckland housing consent growth is concerning given existing supply shortages," said ASB economist Jane Turner. "Strong population growth over the past few years has lifted housing demand in many parts of the country, and we expect momentum to continue at least for another year."
New Zealand's central bank has long signalled that an overheated housing market is a key risk to financial stability and that much of the solution lies in supply. Earlier today the central bank kept interest rates steady at 1.75 per cent and said a recent moderation in house price inflation is welcome, and in part reflects loan-to-value ratio restrictions and higher mortgage rates. However, it said: "it is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand."
