KEY POINTS:
Housing consents fell for the third consecutive month in December, but economists yesterday dismissed the data as a blip and forecast much stronger figures next month.
The weaker building consents data were not expected to stay Reserve Bank Governor Alan Bollard's hand when he considers raising interest rates in March.
Statistics NZ said the number of housing consents including apartments fell 4.9 per cent on a seasonally adjusted basis from November to December.
Excluding apartments, the number of housing consents rose 2.5 per cent.
BNZ chief economist Tony Alexander said activity levels in the housing sector were not necessarily declining, despite the slightly softer figures out yesterday.
"The picture is not as negative as the headline suggests," he said. "It's reasonable to expect that the consent data may bounce back soon due to the demand which is quite clearly there."
Last week Bollard said he would raise rates unless he saw a slowdown in consumer spending and housing.
But Alexander said the Reserve Bank would pay more attention to the real estate industry's house sales data, which remained strong last month.
Darren Gibbs, chief economist at Deutsche Bank NZ, said monthly data were volatile, particularly around Christmas. He too expects better figures soon. Builders had indicated strong demand, he said.
"There is no way that retail or housing market activity will suddenly slow."
Doug Steel at Westpac also predicted stronger data in the coming months.
"The threat of higher interest rates may have dampened developer enthusiasm at the margin.
"However, we expect the trend in building consents to stabilise over coming months and then pick up through this year on the back of rising net migrant inflows."
He had expected a rise in apartment consent numbers but noted these had dropped from 493 consents in October to 113 last month.
The value of non-residential building consents issued fell 12.3 per cent from December 2005 to last month. Demand in this sector dropped from work worth $380 million in December 2005 to $333 million last month.
However, Statistics NZ said the trend for the value of non-residential building consents still remained at a high level.
The value of consents issued for all buildings last month was $897 million, $60 million or 6.3 per cent lowerthan in December 2005.
For the year ended last month, the total value of consents issued for all buildings was $11,182 million, up $205 million or 1.9 per cent from the December 2005 year.
The value of consents for residential buildings rose $418 million, while the value of consents for non-residential buildings fell $213 million.
Jarrod Kerr, economist at J.P. Morgan Securities Australia, questioned whether the latest data showed the housing market cooling.
"Today's numbers alone are not enough to keep the Reserve Bank from tightening policy in March, but they should provide it with some comfort on the outlook for the overheated housing market," he said.
"Although it is difficult to read too much into one month of data from such a volatile series, the substantial drop in building approvals over the past three months has reversed the resurgence in approvals over the three months to October."
Kieran Trass, an Auckland real estate consultant and mortgage broker, said any drop in residential consents helped the rental housing market.
He said rising migration would increase the demand for dwellings while fewer building consents would restrict the supply.
"This latest data implies we can most likely expect upward pressure on rents and house values throughout this year."
Pieter Burghout, Registered Master Builders Federation chief executive, said his members would remain busy this year, particularly with the introduction of voluntary licensing coming up in November.
Building lowdown
What the monthly data showed:
* Consents for 1883 new houses and apartments were issued last month, down on the 2445 in December 2005.
* New dwelling unit applications, including apartments, have been declining since last August.
* The value of non-residential building consents is also falling, though still running at high levels.
* Applications for new hospitals and nursing homes recorded the biggest drop.
