Building consents fall in April, while apartment permits soar

New Zealand building consents fell in April, after the previous month's strong gain, as intentions to build houses decreased, while apartment permits climbed on the back of demand in Auckland for affordable housing.

Seasonally adjusted consents for all dwelling types declined 1.7% to 2137 in April, after rising 10% in March, according to Statistics NZ. The measure has declined in four of the past five months. Housing consents dropped 2.7% to 1477, following a 7.2% jump in March.

On an unadjusted basis, new dwelling consents increased 1.4% to 2112 in April from the same month a year earlier, with new house permits slipping 0.7% to 1365. Apartment consents are at a seven-year high, surging 106% to 467 in April, with almost all of the apartments in Auckland, Statistics NZ said.

"Consented apartment numbers often fluctuate but have returned to historical average levels in the last couple of years, following four low years," Statistics NZ business indicators manager Neil Kelly said. "Consents for houses and townhouses are also at historical average levels, while retirement village consents have reached record highs over the past year."

The building industry is struggling to keep up with demand in Canterbury, where the city recovers from a series of devastating earthquakes and in Auckland, where a shortage of supply has pushed real estate to record levels and seen a resurgence in new home builds.

"The centre of activity in housing construction has clearly shifted," Michael Gordon, senior economist at Westpac Banking Corp, said in a note. "The number of consents in Auckland rose to its highest in nearly 10 years, with multiples [apartments and townhouses] accounting for almost half of the total."

"In contrast, the pace of new consents continued to slow in Canterbury, with the residential side of the quake rebuild now well advanced," he said. "The total number of dwelling consents has flattened out in the last year, and remains below the monthly peak reached last November. This is consistent with our view that the building industry is facing capacity constraints at the national level."

Today's data shows consents rose in five of the country's 16 regions, with Auckland jumping 21% to 912 in the month of April. Wellington consents fell 41% to 120, while Canterbury consents dropped 38% to 427.

The value of non-residential building permits slipped 17% to $632 million in April, from the previous month.

(BusinessDesk)