Building consents hit 7-year high

Building consents hit a new seven-year high in November, with the number of new dwellings consented up from 18,469 in 2013 to 21,225 last year.

Clara Eatherley, business indicators manager at Statistics NZ, this morning released details of extremely high building activity levels.

"November is typically a strong month for new dwelling consents. The number this month was the highest since August 2007. Auckland and Canterbury regions contributed the most to this high number."

Those two areas accounted for 70 per cent of the national total for new dwellings.

In November, $1.3 billion of building work was consented: $867 million of residential work and $426 million of non-residential work.

For the year ended November, compared with the year ended November 2013, the value of building consents increased for all buildings, up $2.6 billion (22 per cent) to $14.4 billion, residential buildings up $1.7 billion (22 per cent) to $9.4 billion and non-residential buildings up $0.9 billion (22 per cent) to $5 billion.

In unadjusted terms, 2420 new dwellings were consented in November, including 474 apartments.

Auckland was the driver of a high number of apartments: 442 apartments were consented there out of 474 nationally. Apartment numbers usually fluctuate from month to month, Statistics NZ said.

Satish Ranchhod, senior economist at Westpac Institutional Bank, said November's consent rise was consistent with expectation that construction activity would increase strongly over the coming year.

"Consent issuance has now retraced all of the decline that occur ahead of last year's election when there was increased uncertainty around the tax treatment of property. Total residential consent numbers increased by 10 per cent in November. November's figures were boosted by a strong increase in the volatile apartments category. However, even excluding apartments, consent numbers were up 2.1 per cent.

"Combined with on-going reconstruction in Canterbury, conditions are lining up for a year of strong construction spending over 2015, particularly in Auckland. Today's data comes on top of other favourable indicators for the housing market, including increases in house sales and mortgage approvals, as well as strong population growth. There are also signs that house price inflation is increasing, particularly in Auckland.

"This strong construction outlook is not limited to residential property, with the value of non-residential building consents rising by 22 per cent in the year to November. Strengthening domestic economic conditions are encouraging increases in business investment spending. In addition, there is a significant amount of infrastructure spending planned for the coming year," he said in a commentary on the data.

The value of non-residential building work consented in November 2014 was $426 million. The regions that contributed the most to this value were Auckland with $114 million, Canterbury $88 million, including $63 million in Christchurch city, and Wellington $64 million, including $54 million in Wellington city.

The building types with the highest total consent values were offices and administration buildings at $155 million, shops, restaurants and taverns at $61 million and factories and industrial buildings at $50 million.

Data out from Trade Me Jobs today showed big growth in the IT, construction and architecture sectors.

See the full Stats NZ building consents release here: