The housing market continues to languish and economists see little sign of a strong rebound soon.
The number of consents for new dwellings issued last month was more than a third lower than in September last year.
Consents for apartments were 60 per cent lower.
Building activity peaked in the middle of last year; the best that can be said this year is that the rate of decline has slowed.
Turnover of existing properties is also weak.
The Real Estate Institute reported 5071 house sales in September, down 19.4 per cent on September last year and the lowest September figure since 1991.
ASB Bank economist Jennifer Innes said monthly sales averaged well under 6000 over the past year, compared with just under 7000 a month in the previous year.
The median house price in September was 1.8 per cent up on a year ago, but that probably reflected fewer sales at the lower end of the market, she said.
The fall in the number of dwelling consents over the past year is larger than the fall in the value of those consents, suggesting the low-value end of the market has suffered most.
ASB expects further weakness in the market for the rest of the year as the results of last year's building boom continue to hang over the market.
Ms Innes said other factors putting downward pressure on the market were:
* The outflow of migrants - a net 9500 people left New Zealand in the year to September.
* Interest rates, which are now about 2 percentage points higher than a year ago.
* Weak consumer confidence due to slowing employment growth and rising inflation.
But the medium-term outlook was brighter.
Interest rates would start to drop towards the end of next year, population growth would pick up as the migration outflow slowed, consumer spending would perk up as higher export incomes fed through to the domestic economy, and the lower level of building would bring supply and demand more into balance.
Deutsche Bank economist Darren Gibbs said the bottom of the housing cycle might have been reached.
Given the rate at which new households were being formed, the current rate of consents, about 19,000 annualised, was sustainable long-term, he said.
"At this stage, however, with population growth modest and consumer confidence low, we see little chance of a strong cyclical rebound in the housing market."
Little sign of rebound in house market
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