Building consents see-saw with 9.8% March fall

New Zealand residential building consents fell in March, reversing gains in February, led by declines in Otago, Tasman and Bay of Plenty.

Seasonally adjusted consents across all dwellings fell 9.8% to 2236 in March from February, when they jumped 10.3%, Statistics NZ said. For houses alone, the decline was 4.1%  to 1643. On an unadjusted basis, new dwelling consents fell to 2315 in March from 2379 in February.

The government statistician doesn't publish detailed seasonally adjusted data. Otago recorded the biggest drop in actual consents, which fell to 126 last month from 172 in February. Consents for Tasman fell to 24 from 42 and for Bay of Plenty declined to 181 from 200. Auckland consents were little changed, slipping to 788 from 787, as were those for Waikato, which rose to 276 from 274. Consents for Wellington fell to 107 from 113 while those for Canterbury fell to 520 from 525.

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 measures were made 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," Westpac economist David Norman said. 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% gain for residential building to $1 billion, and a 7.8% increase for non-residential work to $460 million.

(BusinessDesk)