NZ residential building consents decline 0.9% in May

New Zealand residential building consents declined 0.9 percent in May with Auckland permits still falling short of demand.

Seasonally adjusted consents slipped to 2,377 in May from 2,398 in April when they rose 6.8 percent, Statistics New Zealand said. House permits slid 4.9 percent following a 15 percent rise in April. On an unadjusted basis, new housing consents were up 16 percent to 2,520 in May from the same month a year earlier, and up 13 percent on an annual basis to an 11-year high of 28,387.

Record net migration is putting pressure on the nation's housing market where a shortage of supply is pushing up prices in Auckland, the country's largest city, making accommodation unaffordable for many. The latest data shows Auckland building consents advanced 4.8 percent to 732 in May from April, and were 13 percent ahead of the same month a year earlier.

"Running annual totals for Auckland residential consents suggest that the number of annual consents is flattening out in the 9,300 to 9,600 range," Westpac Banking Corp industry economist David Norman said in a note. "This slowdown in Auckland is bad news given the shortfall of housing in that city, but it appears to be the result of developers waiting for the Auckland Unitary Plan to be finalised before proceeding with development. This hesitancy highlights the need for a speedy finalisation of the plan and clear direction to be provided with regard to development, if the upward trajectory in residential building is to resume soon in the city."

Today's figures show the value of building consents rose 16 percent to $1.57 billion in May from the year earlier month. The value of residential buildings jumped 24 percent to $1.08 billion while the value of non-residential buildings edged up 1.3 percent to $492 million.

(BusinessDesk)

Tina Morrison
Thu, 30 Jun 2016

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NZ residential building consents decline 0.9% in May