New Zealand's residential building consents fell in December, mainly due to a drop in apartment consents.
Seasonally adjusted dwelling consents declined 7.2 per cent to 2,215 in December after falling 9.6 per cent in November, Statistics New Zealand said. Seasonally adjusted permits for new houses, however, rose 3.5 per cent to 1,696 following a 7.7 pe rcent slide in November.
Consents fell sharply on the month in Auckland to 740 versus 1,156 in November. Record net migration is putting pressure on the nation's housing market where a shortage of supply is pushing up prices in Auckland, the country's largest city, making accommodation unaffordable for many.
"The slowdown in Auckland housing consent growth is concerning given existing supply shortages," said ASB economist Jane Turner. "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."
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New Zealand's central bank has long signalled that an overheated housing market is a key risk to financial stability and that much of the solution lies in supply. Earlier today the central bank kept interest rates steady at 1.75 per cent and said a recent moderation in house price inflation is welcome, and in part reflects loan-to-value ratio restrictions and higher mortgage rates. However, it said: "it is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand."
In calendar 2016, 29,970 new dwellings were consented - up 10 per cent from 2015, Statistics New Zealand said. Of those, 9,930 were consents in Auckland which is up 7.3 percent from 2015 but still below the 13,000 estimated to be needed to keep up with an expanding population. In Canterbury, where the Christchurch earthquake residential rebuild is slowly winding down, 5,903 new homes were consented, down 9 per cent from December 2015, Statistics New Zealand said.
The value of building consents was $1.58 billion in December, up 0.4 per cent from November. Residential building consents fell 2.1 per cent in value to $989 million while non-residential permits rose 2.8 per cent to $595 million.