Auckland and neighbours drive residential building consents up 2.3% in December

New Zealand building consents rose in December with demand from Auckland and nearby regions increasing most, while annual dwelling consents reached an 11-year high.

Seasonally adjusted consents for all dwelling types advanced 2.3% to 2464 in December, according to Statistics New Zealand. Housing consents increased 0.8% to 1717, following a 1% increase in November.

On an unadjusted basis, new dwelling consents rose 15% to 2538 in December from the same month a year earlier, with new housing consents up 15% to 1661. Apartment consents soared 183% to 427 in December, while new consents for retirement village units fell 54% to 159. Permits for townhouses, flats and units rose 14% to 291.

Auckland, where a large pipeline of work is building to address the city's housing shortage, accounted for 34% of all consents in 2015 across the country. During the year, 9251 new dwellings were consented in Auckland, up 21% on 2014. The most popular areas in the region were Albany, Mt Albert-Mt Eden-Mt Roskill and the North Shore.

"Auckland's growth was led by consents for townhouses and apartments, highlighting the continued intensification of Auckland housing construction to meet supply shortages," said Jane Turner, senior economist at ASB Bank. "Over the past year just 9250 consents were issued in Auckland. However, against the strong net migration back drop, this pace of building still falls short of Auckland's population growth over the past year."

Auckland's property market has been problematic for the Reserve Bank, with a shortage of supply and strong inbound migration pushing up prices in a period of low inflation. That's meant the central bank has had to manage low interest rates without inflaming the city's property market, which it says poses a threat to the nation's wider financial stability.

Today's data shows Auckland's neighbouring regions of Waikato and Bay of Plenty reported large increases in the year, with Waikato up 27% on an annual basis to 3000 new consents, and Bay of Plenty up 35% to 1901.

Canterbury consents fell 11% to 6489 for the year, although it still accounted for 24% of all new dwellings. The region reached an all-time high for dwelling consents in 2014, with earthquake rebuild demand strong, and has since shown signs of abating. Non-residential building consents in the region were valued at $1.9 billion for the year, up 27% on 2014 and ahead of Auckland.

"Residential consents in Canterbury continue to gently ease, albeit from high levels, as the residential rebuild has now passed its peak," ASB's Turner said.

The value of non-residential work across the country rose 16% to $5.9 billion for the year, with the largest increase in value of building consents for education buildings, up 58% to $1.1 billion. The value of farm building consents dropped 16% to $269 million, partly due to a decrease in dairy-related consents, with milk payouts weak as global dairy prices plummeted early in 2015 and stayed low.

(BusinessDesk)