Residential building consents fall for second month

New Zealand residential building consents fell for a second month in September as activity recovers from a spike higher in July.

Seasonally adjusted consents slipped 5.7 percent to 2,232 in September, following a 5.3 percent slide in August, and a 20 percent jump in July, according to Statistics New Zealand. Permits to build new houses gained 1.5 percent to 1,684.

"The fall this month is not a huge surprise," Westpac Banking Corp industry economist David Norman said in a note. "Consents in July grew by 20 percent, and the fall back in August was smaller than expected. This suggests that the return from the highs of two months ago have taken a little longer to flow through than expected."

On an unadjusted basis, residential consents rose 13 percent to 2,242 from the same month a year earlier, the statistics agency said. Consents for houses increased 19 percent to 1,781, while consents for townhouses, flats and units rose 15 percent to 246. Meanwhile, consents for apartments fell 6.8 percent to 109 while consents for retirement village units slipped 35 percent to 106.

In Auckland, where increased migration has led to a shortage of housing, dwelling consents rose 20 percent to 643 from the year earlier month. The Waikato region recorded the largest increase, with consents jumping 98 percent to 320 from September last year.

Auckland consent numbers are running at an annual level of about 8,700 which is "way below what is needed to meet the long-term shortage in housing that Auckland is experiencing," Westpac's Norman said.

Meanwhile, Wellington recorded the biggest decline in dwelling consents, with a 35 percent drop to 126 from the year earlier month. Consents in Canterbury declined 9.3 percent to 525, as the residential phase of rebuilding earthquake-damaged region winds down as non-residential activity picks up steam.

"We expect that trend to continue as commercial and anchor projects get underway," Norman said.

The value of non-residential work rose 28 percent to $619 million in September from the same month a year earlier, while the value of residential work rose 17 percent to $911 million.

The value of all construction consents rose 21 percent to $1.53 billion in September from the year earlier month. On an annual basis, the value of consents 12 percent to $16 billion.

(BusinessDesk)