Building consents have dropped sharply as the Christchurch rebuild nears the end and apartment developers downed tools and headed away for a holiday.
The somewhat unexpected building consent data for January from Statistics NZ showed seasonally adjusted consents across all dwellings fell 8.2 per cent to 2245 in January from December, while housing consents sank 5.6 per cent to 1646 - the steepest decline since August 2014.
Less residential work is being planned in Canterbury as the earthquake rebuild nears completion and fewer Auckland apartments were applied for during the holiday season.
Philip Borkin, ANZ senior economist, asked: "Is that the top?" and cited the construction sector's major contribution to New Zealand's strong domestic economy. Westpac industry economist David Norman explained: "A correction in Canterbury was expected, but the scale of the fall was surprising. Residential consents fell from around 500 in December to just 350 in seasonally adjusted terms."
Auckland apartment consents followed that downward trend. "The change in month-on-month residential consents was mostly due to the usual suspect - multi-unit apartment and terraced houses consents, which can swing total consent figures sharply due to their size," Norman said.
"In Auckland, our biggest multi-unit market, seasonally adjusted consents fell 23 per cent in the month, but a decline in stand-alone houses consented accounted for just 15 per cent of this decline."
The new data was a big turnaround because consents had rocketed to an 11-month high in December, with 27,132 new dwellings getting sign-off throughout all of last year. That was the highest annual total since 2004.
Jane Turner, ASB senior economist, encouraged perspective on the latest data.
"Given the usual volatility in building consents, the weaker number is not concerning. The softer results appear to be centred in Auckland, with a sharp decline in apartment consents. Weaker apartment consents, particularly at the start of the year, are not too surprising," Turner said.
"Canterbury residential consents were also very weak as the bulk of earthquake rebuild and repairs on housing have now commenced or been completed," she said.
"The recent increase in seismic activity may also contribute to a slowdown in rebuild and repair progress over the early part of 2016."
On an unadjusted basis, new housing consents were 13 per cent higher than a year earlier at 1286, helping offset a 24 per cent drop in apartment permits to 89 and a 42 per cent slump in townhouses, flats, and units intentions to 185.
On an annual basis, new housing consents were up 5.7 per cent to 19,183, with all dwellings up 9.5 per cent to 27,124.
Consents in Canterbury dropped 38 per cent to 289 in January from a year earlier, while Auckland permits were up 5 per cent at 506 in the month. On an annual basis, Auckland consents were, at 9275, still behind the 13,000 the city is estimated to need to match population growth.
The value of non-residential building consents fell 12 per cent to $310 million, for an annual increase of 14 per cent to $5.88 billion. The value of all buildings rose 6.9 per cent to $1.07 billion in the month, and increased 14 per cent to $16.51 billion in the year.
Was that the top?
• Building consents fell sharply in January.
• Down 8.2% compared with December.
• Canterbury rebuild end was one cause cited.
• Fewer Auckland apartment applications was another.
• Economists express surprise but encourage perspective.
- Additional reporting BusinessDesk