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Housing data probably can't get any worse: Economist


Monday 31st January 2011

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Building consent figures fell sharply in December, with one economist saying they probably cannot get any worse.

Figures from Statistics New Zealand today show the 994 new dwellings, including apartments, authorised in December were the lowest in a December month since the series started in 1965.

The number of consents was 27 percent down from a year earlier, while the 909 dwelling units excluding apartments was down 28 percent and the 85 new apartments was 8.6 percent lower.

Seasonally adjusted new dwelling unit consents, including apartments, were down 19 percent, while excluding apartments there was an 11 percent decline, the sixth consecutive monthly fall.

The value of residential building consents fell 26 percent in December from a year earlier to $386 million, the lowest value since early 2009.

For the 2010 calendar year the number of new dwelling units, excluding apartments, was 13 percent higher than 2009 at 14,663, but 2010 was still the second-lowest annual total for a December year since the series began in 1990.

Non-residential building consents were worth $332m in December, 18 percent lower than a year earlier, while for the year the non-residential consents value was $3.76 billion, down 17 percent on 2009 which had the highest value on record for a December year.

ANZ head of market economics and strategy Khoon Goh said building consents were "at a depressing level, and probably cannot get any worse".

While the fall in house sales during the middle of 2010 had foreshadowed a fall in consents, the plunge in December had been a surprise.

Such weakness suggested there would not be much new dwelling construction activity during the first half of 2011, he said.

"While we do not subscribe to the notion that there is a housing shortage at present ... we will start to very soon if consents continue to be weak."

Rebuilding after the Canterbury earthquake was expected to provide a boost to activity, but there were no signs of that in the consent data yet.

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