The release of depressed new housing data was tempered yesterday with predictions of a huge sector turnaround from the Christchurch earthquakes.
Statistics NZ said new house consents for January were down 19 per cent compared with January, 2010.
From an annual 26,025 consents issued in 2006, consents for just 15,427 dwellings were issued in the 12 months to January this year.
Although that was up on the previous year when 14,655 new dwelling consents were issued, the downturn in new house construction is one of the reasons cited for Auckland's residential rent crisis.
Economists said Christchurch would be a catalyst for change but not until next year.
Philip Borkin at Goldman Sachs said the southern disaster would spark more building work in the longer term.
"The outlook for construction is obviously now heavily dependent on remedial work from the Christchurch earthquakes. We are not expecting the rebuild to really begin until late 2011 or early 2012," he said.
"Clearly the outlook for consent issuance and the construction sector more generally, is dominated by eventual remedial work associated with the Christchurch earthquakes. We expect the earthquakes will have a negative influence on construction activity in the near-term as focus is on rescue and damage assessment.
"It is not until the second half of 2011, but more likely 2012, where we expect to see consents activity associated with the quakes begin to pick up. Putting this aside though, we believe consent issuance will become a less relevant gauge for future construction activity anyway given a good portion of remedial work associated with quake reconstruction - on top of the leaky buildings crisis - will not involve consents," he said.
Sharon Zollner, ANZ senior economist, said dwelling consents bounced back from their December plunge.
"But there was more than a whiff of dead cat about it, with only half the drop recovered. Non-residential consents fell further in value terms, though increased in terms of area," she said.
"It is up to alterations and renovation activity to hold things up over the first half of this year. Few new houses are going to be built and earthquake rebuilding is not likely to get under way in a meaningful way for a year.
"Although consents and activity are languishing at present, the construction sector is set to be a key bottleneck for the economy over coming years as the rebuild in the south clashes with housing shortages in the north," she said.
Statistics NZ said the value of consents for all buildings in January was $537 million, down 11 per cent from January 2010 and the lowest in any month since February 2002.
The value of residential building consents was $309 million, down 19 per cent from January 2010 and the lowest value since January 2002.
The value of non-residential consents was $228 million, up 2.3 per cent from January 2010.