House-building sector still down in the dumps

The house-building sector is still in the doldrums, according to figures out yesterday from Statistics New Zealand.

A partial rebound last month was driven by a rise in the number of apartments but overall the sector remains down.

In February, 1059 dwellings were authorised, of which 193 were apartments. In February last year, 1874 dwellings were authorised.

Seasonally adjusted, the total number of new dwellings was up 12 per cent in February after falling 13 per cent in January. When apartments were excluded the improvement in February was just 0.3 per cent.

Statistics NZ said February's building consent data showed the number of new houses authorised, excluding apartments, had declined steadily since June 2007.

"The trend has fallen more than 50 per cent since then and is currently at its lowest level since this series began 17 years ago.

"The value of consents for residential buildings was below the value of consents issued for non-residential buildings. This also occurred in January 2009 and before that in June 1998," Statistics NZ said.

Shamubeel Eaqub of Goldman Sachs JBWere described the house-building sector as being "stuck at a miserable low".

Dwelling consents excluding the volatile apartment sector rose marginally but the level of activity could be stabilising, albeit at discouragingly low levels, he said.

Robin Clements of UBS said the seasonally adjusted number of new dwellings including apartments rose 11.6 per cent last month.

"The best that can be said is that after nine consecutive seasonally adjusted monthly falls, any positive number is better than another negative." Clements said.

The house building downturn will likely extend into the second quarter of this year and be a drag on real GDP growth.