Fewer building consents were issued last month, but house building continues to run at historic highs.
Statistics New Zealand said yesterday that residential consents for buildings worth $625 million were issued last month, down $119 million or 16 per cent on March last year. A fall in apartment consents wasthe main reason for the fall. It said that despite the drop, house building was still running at historically high levels.
Non-residential consents were issued for buildings worth $369 million, $45 million or 11 per cent less than March last year.
Compared with the month before, residential building permits issued in March were down seasonally-adjusted 14.1 per cent from February. In February building permits rose seasonally-adjusted 11.7 per cent.
Annette Martins, associate economist at Macquarie Bank, said last month's softening was partly driven by the fall in apartment approvals, down 75 per cent in the year to March.
The data reflected signs of general weakness across the housing sector but because it was monthly, it gave a volatile picture.
She noted that building consent data had strengthened in February.
The longer-term outlook was for the building sector to slow down.
Martins said slower domestic demand was expected this year and the lagged effects of higher interest rates were starting to filter through the property market and building approval data was likely to continue on a downward trend. Residential approvals would continue to weaken.
The non-residential sector would also weaken because of the less-robust general economic outlook.
The New Zealand Institute of Economic Research said building consents had plateaued at around $4 billion a year, which was close to historical highs.
In a forecast prepared for consultants Rider Hunt and released this week, the institute said non-residential building work would grow fastest in the Waikato, Gisborne, Taranaki and Otago regions. Activity would slow most in Nelson and Northland. Activity had slowed in Auckland and Canterbury but Wellington had seen modest growth levels.
Building Slowing
*Residential building permits worth $625 million were issued in March, down $119 million or 16 per cent on the year before.
*Non-residential consents were worth $369 million, down $45 million or 11 per cent.
