NZ building consents see-saw with 9.8% March fall

Friday 29th April 2016

New Zealand residential building consents fell in March, reversing gains February and led by a drop-off in Auckland Wellington and Otago while Canterbury recorded an increase.

Seasonally adjusted consents across all dwellings fell 9.8 percent in March from February to 2,236, seasonally adjusted, Statistics New Zealand said. For houses alone, the decline was 4.1 percent to 1,643. On an unadjusted basis, new dwelling consents fell to 2,315 in March from 2,379 in February.

Consents in Auckland fell to 330 from 404 the previous month, while in the Waikato they gained to 92 from 82 and in Wellington fell to 31 from 48. In the South Island consents rose to 182 in Canterbury from 164 in February and fell to 52 from 64 in Otago.

The overheated Auckland housing market is being closely watched because the Reserve Bank has previously cited the risk of a correction as a threat to the nation's financial stability and signs are that demand in the city is spilling into other regions. Yesterday governor Graeme Wheeler said there were "some indications that house price inflation in Auckland may be picking up" after measure were put in place to cool demand. The median price in Auckland climbed above $800,000 for the first time in March.

"As expected, seasonally adjusted residential building consent numbers fell in March after exceptionally strong growth in February," said Westpac economist David Norman. Still, "scale of the fall-back was surprising" and a large part may have been related to the fact that Easter fell in March this year. Westpac expects "there may be a relatively strong rebound" this month.

Actual consents for apartments, typically a volatile series because of the lumpy nature of developments, dropped to 32 in March from 204 in February, while consents for retirement units rose to 134 from 122.

The actual value of all building work consented in was $1.5 billion, reflecting a 10 percent gain for residential building to $1 billion, and a 7.8 percent increase for non-residential work to $460 million.

BusinessDesk.co.nz

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