Building consents reach six-year high

Picture / David White
Picture / David White

New Zealand building consents for residential housing rose 7.6 per cent in December, taking the annual level of new permits issued by local councils to a six-year high.

New dwelling consents, including apartments, rose to a seasonally adjusted 2,169 in December from 2,016 a month earlier, according to Statistics New Zealand. Excluding apartments and retirement village units, which are typically volatile from month to month, seasonally adjusted consents climbed 11 per cent to 1,762, the highest level since February 2008.

Annual residential issuance rose 30 per cent to an unadjusted 21,300 in 2013 from a year earlier, the most since 2007 when 25,590 permits were issued. Of that, 18,892 new houses received consents, up 25 per cent on the year, and 2,408 new apartments were consented, a gain of 38 per cent.

The annual gain in new dwelling consents was driven by increases in Auckland and Christchurch, the country's two biggest cities, whose property markets have been bubbling away due to a lack of housing stock.

"The construction sector ended 2013 on a high note, with residential building consents much stronger than expected in December," Westpac Banking Corp senior economist Michael Gordon said in a note. "The Canterbury rebuild continues to dominate the totals, but the re-emergence of the Auckland apartment market is a notable recent trend."

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.

Reserve Bank governor Graeme Wheeler today said "there appears to have been some moderation in the housing market in recent months," in his statement holding the official cash rate unchanged at 2.5 per cent.

Today's figures show a 12 per cent increase in the value of non-residential building consents issued to $379 million in December from the same month a year earlier, for an annual increase of 6.9 per cent to $4.18 billion.

The value of all building permits climbed 29 per cent to $1.07 billion in December, for an annual increase of 20 per cent to $12.08 billion.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a3 at 30 Jul 2014 15:05:04 Processing Time: 212ms