Anne Gibson

Property editor of the NZ Herald

Auckland buildings consents keep climbing in January

A drop in the record number of apartments and retirement units sent building consent figures down 8.3pc in January. Photo / David White
A drop in the record number of apartments and retirement units sent building consent figures down 8.3pc in January. Photo / David White

Auckland's house-building boom continues, with latest Statistics NZ data showing rising workloads.

The number of new dwelling consents issued in January rose in 13 out of 16 regions and those with the biggest rises were Auckland up 61 consents to 433 including 68 apartments, Canterbury up 142 consents to 520 including 27 apartments, Wellington up 35 to 127 including 59 apartments and Waikato up 33, to 137.

The national trend for new dwellings consented continues to rise and is at its highest level since September 2007.

The trend for new dwellings has doubled since the historic low point in March 2011, but is still 28 per cent below the peak in January 2004, said industry and labour statistics manager Blair Cardno.

Since September 2010, $1497 million of building consents have been identified as earthquake-related. This includes consents for 1425 new dwellings.

Rising property prices, particularly in Auckland and Christchurch, became a headache for the Reserve Bank last year, which was loathe to lift interest rates in response for fear of fuelling demand for an already elevated currency.

Instead, the central bank imposed restrictions in October on the level of low-equity mortgage lending banks could undertake as a means to reduce the level of riskier loans.

ASB Bank economist Daniel Smith said the weakness in January building consents had followed two "exceptionally strong months."

"The outlook for construction remains very strong and we still expect the OCR to rise from March," said Smith.

Much of the strength in building consents over November and December was concentrated in Auckland and Canterbury, he said.

"Auckland consents were around 20 per cent below the December level according to our seasonally-adjusted estimate, but were still 15 per cent above the levels seen October," said Smith.

Today's stats also show that non-residential construction demand was also improving, he said, underpinned by increased demand for new office buildings.

"This is in line with recent business surveys which show increased optimism amongst businesses towards investing in new commercial buildings. We expect higher business confidence will flow through to a continued improvement in non-residential construction demand over the coming year."

Westpac Bank economist Michael Gordon described it as "building consents came back down to earth in January".

"Even so, the decline was less than we expected, suggesting that the underlying trend in consents has genuinely picked up in recent months."

Gordon said he had been expecting a 15 per cent decline after the combined 20 per cent increase over November and December.

"Hence, today's outturn suggests there may have been a genuine lift in the pace of construction sector activity in recent months."

Today's figures show the value of non-residential building consents rose 29 per cent to $289 million in January from a year earlier, and were up an annual 8.9 per cent to $4.24 billion. The value of all building consents rose 26 per cent to $930 million in January from a year earlier, and was up 20 per cent to $12.27 billion.

with BusinessDesk

- NZ Herald

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