Housing consents slump in February

Photo / Paul Estcourt

Building consent numbers for new dwellings reached the lowest seasonally adjusted number in around two years in February, Statistics New Zealand figures show.

Last month 973 consents were issued for new dwelling units, down 29 per cent from February 2010. When apartments were excluded the fall was even bigger - down 35 per cent to 884 new units - as the number of apartments consented was 76 higher than a year before at 89.

Seasonally adjusted, the number of new dwellings authorised was down 7.8 per cent from January when apartments were excluded, the lowest level since February 2009. Including apartments the fall was 9.7 per cent to the lowest level since January 2009.

The value of residential building consents was 20 per cent lower in February than a year earlier at $389 million, while the value of non-residential building consents fell 19 per cent to $257m. For all buildings the value was down 19 per cent to $645m.

"Every month of very low consent issuance adds more downside risk to our already weak near-term construction outlook," said ASB economist Chris Tennent-Brown.

"Nonetheless, the extent of damage in Canterbury means that a significant amount of construction activity will take place in the years ahead. The nationwide weakness in consents suggests the repair work cannot come soon enough for the construction sector."

Tennent-Brown said today's building consent data "provides more retrospective justification" for the Reserve Bank's recent cut in the Official Cash Rate.

In the year to February, the value of residential consents was up 2.1 per cent to $5.41 billion, that of non-residential buildings fell 14 per cent to $3.71 billion, while for all buildings the value was down 5.2 per cent to $9.12 billion.

In Canterbury, hit by a devastating earthquake on February 22, dwelling consents were 101 units lower than a year earlier at 148, but Statistics NZ said it was not possible to say how much of that fall was due to the earthquake.

Sixteen Canterbury consents worth $2.6m were identified as related to previous earthquakes, including three new dwellings.