NZ residential building consents drop 7% in June

New Zealand's housing market has been on a tear with demand outstripping supply and pushing up values.

New Zealand residential building consents fell 7 percent in June as fewer new homes were consented in the month, although new permits were still up an annual 4.7 percent.

Some 2,560 new houses, apartments, townhouses, retirement village units and flats were consented in June. Of that total, 1,691 houses were consented, down 9.2 percent on the month. Still, 30,453 were consented in the year ended June 30, Statistics NZ said today.

"Annual new home numbers are nearing those last seen in 2004, although they remain well below the all-time peak of the mid-1970s when consents reached about 39,000 a year," Stats NZ prices, accommodation, and construction senior manager Jason Attewell said.

In seasonally adjusted terms, dwelling consents fell 1 percent on the month in June after lifting 7 percent in May.

"Consents can be volatile month to month, and this was particularly evident in consents for townhouses, which lifted strongly in May and fell back in June. Looking beyond the volatility, we are seeing encouraging signs that residential building demand is lifting in Auckland and Wellington," said ASB Bank senior economist Jane Turner.

New Zealand's housing market has been on a tear with demand outstripping supply and pushing up values. In Auckland, the country's largest city, the lack of housing supply has been most acute as record migration drives demand and Attewell noted that one-third of all new homes consented across the country were in Auckland in the year to the end of June.

Including alterations, $1.5 billion of building work was consented in the month of June, down 18 percent on the month, Stats NZ said. That included $1.1 billion worth of residential buildings and $451 million for non-residential buildings.

In the year to June, the value of consents rose 6.7 percent to $19 billion. Residential consents increased 9.3 percent to $12.8 billion while non-residential consents advanced 1.6 percent to $6.2 billion.

Among non-residential buildings, the value of consents for hotels, motels, and other short-term accommodation shot up to $490 million in the June 2017 year, Stats NZ said. New hotels in Auckland and Canterbury drove the 216 percent increase from the June 2016 year.

"Investment in hotels, motels, and other short-term accommodation more than tripled in the June 2017 year," Attewell said. "This coincides with ongoing record international visitor numbers."


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