New dwelling consents fall in September, may reflect election jitters

Building consents for new dwellings fell in September from August, in what may be a sign the market is jittery about the new government, although they remained higher on an annual basis.

Some 2,770 new houses, apartments, townhouses, retirement village units and flats were consented in September, down 12.5 percent in actual terms on the month but up 6 percent versus the same month a year ago, Statistics New Zealand said in a statement.

New Zealand's property market has cooled in recent months as stricter lending criteria take the heat out of an environment where demand had outstripped supply and pushed up values. In addition, uncertainty around the recent election as well as the new government's plans may have put a damper on projects. Data today from the RLB Crane Index - which measures the construction industry's workload in key New Zealand cities by counting the number of cranes - showed construction activity is slowing in Christchurch, Dunedin and Hamilton and picking up in Wellington, Auckland and Queenstown.

The New Zealand dollar did not react to the soft building consents data but OMF private client manager Stuart Ive said it could dent the kiwi longer term as it "could be the first signal housing as a whole is very nervous regarding the new government." The kiwi was trading at 68.80 US cents after the data versus 68.72 US cents as at 8am.

Of the total, 1,843 houses were consented, down 0.5 percent on the year, while consents for apartments rose 22.6 percent to 415 and consents for townhouses, flats and units rose 14.7 percent to 427. Retirement village unit consents fell 8.9 percent to 85.

On an annual basis, 30,892 new homes were consented in the September 2017 year, up 3 percent compared with the September 2016 year. The national increase was driven by townhouses and apartments, with slight falls for retirement village units and houses, Stats NZ said.

Auckland accounted for 868 of the new dwelling consented in the month, down 27 percent from August, while Wellington accounted for 282, up 16 percent on the month. In the South Island, Canterbury accounted for 470, down 6 percent in the month.

In seasonally adjusted terms, dwelling consents fell 2.3 percent in the month after rising 5.9 percent in August. The seasonally adjusted increase in the number of new homes consented in August 2017 was revised down from 10 percent.

Including alterations, $1.8 billion of building work was consented in September down from $2.1 billion in August. That included $1.2 billion of residential building permits and $546 million for non-residential buildings.

(BusinessDesk)