The number of new Auckland houses getting the green light has edged up but continues to be well short of what is needed.

And the data is worrying economists.

ASB senior economist Jane Turner and Westpac senior economist Satish Ranchhod both expressed concern today after Statistics NZ data said the number of seasonally adjusted residential building consents issued in January was up by 0.8 per cent across the country and by 0.7 per cent in Auckland.

Their stance is in contrast to Building and Construction Minister Nick Smith, who has praised the level of building activity.


However, the annual trend is rising.

In the year to January, 30,123 new residential dwelling consents were issued, Statistics NZ said, well up on the year to January 2016's 27,124 new dwelling consents.

Turner expressed disquiet about the latest monthly figures.

"Construction activity remains a key driving force of New Zealand's economic growth. The slowdown in Auckland housing consent growth is concerning given existing supply shortages," she said of the modest 0.7 per cent Auckland increase in consents for January.

"Strong population growth over the past few years has lifted housing demand in many parts of the country, and we expect momentum to continue at least for another year."

Nick Smith has expressed satisfaction with housing consent data lately. Photo/Jason Oxenham
Nick Smith has expressed satisfaction with housing consent data lately. Photo/Jason Oxenham

Residential dwelling consents lifted slightly in January, the trend in housing consent issuance is now declining and non-residential building demand remains high, she noted.

"Non-residential consents dipped in January, as is usually the case. Consents appear to be holding at recent high levels, and are 9.2 per cent higher than a year ago," Turner said.

Ranchhod said the data "leaves us looking at a soft start to the year in terms of construction activity".

Lack of activity in Auckland was particularly worrying, he said.

"Housing consent issuance in Auckland is continuing to languish at levels lower than what is required to keep up with the needs of population growth. Consent numbers in Auckland dropped back 0.7 per cent over January, the sixth decline in the past seven months using Westpac's adjustment for usual seasonal trends," Ranchhod said.

"And over the past year, just over 10,000 new dwellings were consented in Auckland. To keep up with population growth and address the existing shortfall, Auckland needs to build upwards of 11,000 dwellings a year," he said. "And even then, it will require around a decade of strong building activity."

Phil Twyford, Labour's housing spokesman, said Auckland's huge housing shortage was growing, not shrinking.

"The city is already around 35,000 houses short and that's growing by 500/month. Bill English and Nick Smith have made a hash of the housing crisis with half-hearted measures and stunts. They are more concerned with trying to make voters think they are doing something than actually solving the problem.

"It's simple: we're not building enough affordable starter homes. The Government needs to do its part," Twyford said.

"Soon, Parliament will vote on Labour's KiwiBuild Bill that requires the Government to build 10,000 affordable homes a year to sell to first-home buyers. If National wants to get serious about the housing crisis, they need to back the KiwiBuild Bill. They should also adopt Labour's plan to boost the construction workforce with three years' free tertiary study and dole for apprenticeships," Twyford said.

Smith said building activity was at a record high, topping $19 billion for 2016 after five straight years of strong growth. New Zealand was in its longest and strongest growth phase in building activity, with record levels of investment in homes, commercial buildings and infrastructure, he said.

Phil Twyford says we're not building enough affordable starter homes. Photo/George Novak
Phil Twyford says we're not building enough affordable starter homes. Photo/George Novak

"The total value of consents in 2016, at $19b, is the highest ever and 30 per cent more than the previous peak last decade, in inflation-adjusted terms. I am particularly encouraged by the ongoing strong growth in residential building activity, that has increased 19 per cent nationally and 27 per cent in Auckland over the past year.

"This is the fifth straight year of strong growth. You cannot grow a sector as large or as complex as building at more than about 20 per cent compound per year without incurring problems with quality," Smith said last month.

Residential dwelling consents issued by number, December 2016-January 2017

NZ up 0.8% seasonally adjusted
1752 new dwellings consented in January:
1253 houses
285 townhouses, flats, and units
116 apartments
98 retirement village units
Auckland: up 0.7%

ANNUAL NATIONAL PICTURE (years to January) all dwellings consented
2012 13,893
2013 17,143
2014 21,622
2015 24,776
2016 27,124
2017 30,123
[Source: Statistics NZ]