Building consents jump 10pc in Feb

Consents were issued for 1,362 new housing units and 13 new apartments in February. Photo / Northern Advocate

Building consents issued in February jumped 10 per cent, after rising one per cent the month before.

The number of houses authorised - excluding apartments - was at its highest level since May 2008.

When the volatile apartment category is included, the number of new housing units authorised rose 5.9 per cent after being adjusted for seasonal effects.

"The trend for new housing units has been increasing since early 2009 but is showing signs of flattening in recent months," business statistics manager Louise Holmes-Oliver said. "However, the trend remains at a low level, and is almost a third lower than the recent peak in June 2007."

Robin Clements, senior economist at UBS New Zealand said the jump in February dwelling consents "was a surprise in that the general tenor of the housing sector indicators has been one of weakening activity".

"However, the upside surprise was well within the margin of error for these indicators and did not alter the slowing pace of trend growth in consents - the total advanced just 0.3 per cent month-on-month in February (the weakest in a year), while the ex-apartment trend rose 1.8 per cent month-on-month (its weakest since April last year)" said Clements.

"The increase in dwelling consents to date is likely sufficient to result in further increases in residential building activity - after real growth of 4.8 per cent in the fourth quarter last year in the first two quarters of this year, which should also be associated with increased spending on furnishings and appliances," he said.

The data increased the likelihood of the Reserve Bank "being on track for a mid-year start to withdrawing monetary stimulus."

ANZ economist Mark Smith said today's data "followed a sequence of highly volatile readings for consents".

"Indicators for residential consent issuance over the coming months (e.g. house sales) highlight the risk of this recovery not being maintained".

Non-residential building consent values climbed, but from exceptionally low levels. Much of the higher consent issuance was for education and health buildings, with the improvement in commercial construction less marked, he said.

"We continue to question the durability of non-residential construction in the absence of an environment for higher government spending."

In February, residential building consents were issued for:

* 1,362 new housing units (excluding apartments)

* 13 new apartment units, the lowest monthly number since July 1995.

For the year ended February 2010, the value of consents issued for residential buildings fell $471 million (8.2 per cent), while the value for non-residential buildings fell $266 million (5.8 per cent), compared with the year ended February 2009


- NZ HERALD