NZ building consents static in May as Auckland intentions decline

Tuesday 30th June 2015

New Zealand building consents were virtually static in May as dwindling demand in Auckland offset increased construction intentions in other parts of the country.

Seasonally adjusted consents for all dwelling types was little changed at 2,151 in May, from 2,150 in April, according to Statistics New Zealand. Housing consents rose 2.4 percent to 1,520, following a 1.8 percent decline in April.

On an unadjusted basis, new dwelling consents rose 2.2 percent to 2,171 in May from the same month a year earlier, though new housing consents dropped 5.8 percent to 1,587. Apartment consents retreated from a seven year high, falling 21 percent to 115 in May from the year earlier. New consents for retirement village units rose 45 percent to 184, while permits for townhouses, flats and units jumped 71 percent to 285.

New dwelling consents in Auckland, New Zealand's most populous city, fell for the first time since January, down 29 percent in the month of May to 651.

"A pullback in consents in Auckland was offset by gains in the rest of the country," Westpac Banking Corp economist Michael Gordon said in a note. "The main driver of the Auckland figures was a drop in the multiples category (apartments, townhouses and units). That's no real cause for concern, as this category is quite volatile and the April total was the second highest in the last decade."

Today's data shows consents fell on a monthly basis in three out of the country's 16 regions, with Hawkes Bay and Nelson declining, while consents on West Coast were static. Wellington consents increased 25 percent to 150 last month, while Canterbury consents rose 29 percent to 549.

The New Zealand building industry has been stretched to keep up with demand in Canterbury, where the country's second largest city is recovering from a series of devastating earthquakes, and in Auckland, where a shortage of supply has pushed real estate prices to record levels and seen a resurgence in new home builds.

"Notwithstanding the latest monthly figures, the centre of gravity in the homebuilding industry is clearly shifting from Canterbury to Auckland," Westpac's Gordon said. "The residential side of the post quake rebuild is now well advanced, while Auckland still requires a further lift in building activity to meet population growth."

On an annual basis, Auckland dwelling consents were up 6.5 percent in May compared to the same month a year earlier, while Canterbury dwelling consents declined 9.3 percent.

The value of residential building consents rose 3.3 percent in the month of May to $714 million, while on an annual basis it increased 13 percent to $8 billion

The value of non-residential building permits rose 32 percent to $486 million in the month of May. On an annual basis the value of non-residential building consents rose 22 percent to $5.4 billion.

BusinessDesk.co.nz

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