Home building consents fall 2.1% in December, first decline in 3 months

New Zealand residential building consents in December fell for the first time in three months, rounding out a year in which the number of permits issued reached a seven-year high.

The number of new residential permits issued in December fell 2.1 percent to 2,198, seasonally adjusted, after gains in both October and November of more than 10 percent, according to Statistics New Zealand. Consents in all of 2014 rose 16 percent to 24,680, the highest since 2007.

The Reserve Bank said yesterday it saw signs that the housing market was showing signs of picking up, particularly in Auckland, in a statement that said there is less prospect of interest rate rises and even the chance of a cut, a move that could reduce mortgage costs and further fuel the property boom. Auckland contributed most to the increase in annual consents in 2014, which rose 20 percent to 7,595, while in Canterbury they rose 27 percent to 7,308 and in Waikato were up 5.5 percent to 2,369.

In the month, dwelling consents in Auckland fell to 630 from 967 in November. Waikato consents rose to 192 from 181, and those in Wellington rose to 171 from 104. Canterbury led gains in South Island with 732 from 726 in November.

"The Canterbury rebuild continues to underpin residential and non-residential building demand and indicates further Canterbury construction activity growth," said Jane Turner, economist at ASB. "A slowdown in Auckland residential building growth could result in further acceleration in Auckland house price growth over 2015. Stronger house prices should act as a signal to build."

Excluding consents for apartments, which tend to be volatile because of the timing of projects, permits rose a seasonally adjusted 1.6 percent in December from November. There were 466 consents issued for apartments last month, unadjusted, down from 474 in November and down from 473 in the same month of 2013.

The value of non-residential building work consented in December was $431 million, with $149 million of consents in Canterbury, $88 million in Auckland and $37 million in Wellington.

The total value of building work consented in the year rose 21 percent to $14.6 billion, including a 20 percent gain for residential buildings to $9.5 billion and a 21 percent gain for non-residential buildings to $5.1 billion.

(BusinessDesk)