Building consents flatline in August

New Zealand building consents held steady in August from a month earlier, underpinned by approvals for apartments and retirement village units.

The number of seasonally adjusted consents was flat at 2,104 in August, the same reading as in July, which recorded a 1.7 percent drop from the previous month, Statistics New Zealand said. Excluding apartments, which can be volatile, consents dropped 1.6 percent to a seasonally adjusted 1,794 in August, following a 2.3 percent drop in July. (See graph on the right)

"Residential building consents were flat in August, slightly better than our assumption of a 1 percent decline, but with more of a skew towards apartment units, which includes retirement units, than we expected," Michael Gordon, senior economist at Westpac Banking Corp, said in a note. "Indeed, it's clear that the apartments segment of the market has become a major growth area again in the last year."

Auckland, New Zealand's largest city where a housing shortage is pushing up prices, made up a third of dwelling consents in August. The number of consents, on an unadjusted basis, fell 23 percent in the month to 656. On a yearly basis, consents were 30 percent higher than in August 2013, of which three quarters were apartment consents.

Meantime, the pace of consents slowed in Canterbury for a second consecutive month. The country's second-largest city is being rebuilt after the 2010 and 2011 earthquakes and consents slipped 17 percent to 540 in August, extended a fall from a high of 623 in June. Still, Canterbury consents were 16 percent ahead of August last year.

Combined Auckland and Canterbury consents account for 59 percent of New Zealand's building activity.

In Wellington, consents were almost unchanged from July at 118 from 119, and compared with 113 in July last year.

Excluding seasonal adjustments, the total number of residential consents for new dwellings in August fell 11 percent to 2,022 from the previous month and were 16 percent higher than August last year.

The value of all building consents issued in the month was $1.19 billion, including $753 million of residential consents and $433 of non-residential work, the statistics agency said.

(BusinessDesk)