New Zealand building consents rose at a modest 0.1 percent pace in July, slower than the 3.5 percent pace in June, reflecting a drop in the number of consents issued in Canterbury and a pick up in Auckland.
The number of consents increased to a seasonally adjusted 2,105 in July, from 2,103 in June, Statistics New Zealand said. Excluding apartments, which can be volatile, seasonally adjusted July consents fell 2 percent, following a 3.1 percent gain in June, the agency said. (See graph below)
Auckland, the nation's largest city where a shortage of housing is pushing up prices, recorded the biggest jump in the month with a 54 percent surge to 849, which is 53 percent ahead of July last year. Meantime, the pace of issuance slowed in Canterbury, where the city is being rebuilt following a series of earthquakes, with consents slipping 2.2 percent to 609 from a high of 623 in June. Still, Canterbury consents were 20 percent ahead of July last year.
"Dwelling consent issuance held up at high levels in July, led by continued strong house-building demand in Auckland and Canterbury," Christina Leung, an economist at ASB Bank, said in a note. "Beyond the monthly volatility, dwelling consent issuance in these two regions remains on a clear upward trend. We continue to expect strong house-building demand in Auckland and Canterbury will drive construction growth over the next couple of years."
In Wellington, consents were almost unchanged from June at 119 from 118, and compared with 169 in July last year.
Excluding seasonal adjustments, the total number of residential consents for new dwellings in July rose 17 percent to 2,282 from the previous month and were 21 percent higher than July last year.
The value of all building consents issued in the month was a record $1.39 billion, including a record $876 million of residential consents and the second-highest ever value of non-residential work at $512 million, the statistics agency said.
"The continued increase in non-residential building consents in July is another positive development," said the ASB's Leung. "The increase in July was led by stronger demand for new office buildings and retail outlets. With businesses showing increasing optimism towards investment, we expect this will flow through to a continued improvement in commercial building demand over the coming year."