NZ residential buildings perk up in February after a lull
New Zealand residential building consents posted their biggest monthly gain in eight months in February, snapping out of a lull that persisted through spring and summer.
Seasonally adjusted dwelling consents rose 14 percent to 2,605 in February, posting its first double-digit growth since June last year, with new housing permits also gaining 14 percent to 1,858, Statistics New Zealand said. Annual residential permits rose 8.7 percent to 30,162 in the year through Feb. 28, and new house consents gained 9.1 percent to 21,326.
New building issuance has softened in recent months as the energy in the Auckland housing market slowed with the imposition of lending curbs and tougher credit criteria, and on an actual basis, residential building consents were 1.6 percent higher in February from a year earlier at 2,418, with new housing permits up 2.9 percent at 1,761.
"While we saw a strong seasonally adjusted increase this February, the actual number of homes consented was up only slightly from last year," business indicators senior manager Neil Kelly said in a statement.
New Zealand's property market remains problematic for policymakers, with central government laying much of the blame on local authorities' planning processes in stifling supply which has led to a bottleneck driving up prices as the nation experiences record inbound net migration. That's led to a massive pipeline of building work to meet the housing shortfall, although the building sector is facing capacity constraints, especially in Auckland where the need is most acute.
Today's figures show 800 new consents worth $342 million were issued in Auckland in February, compared to 787 permits worth $404 million the same month a year earlier. In the year through February, 9,310 new dwelling consents were issued in the country's biggest city, still below the 13,000 estimated to be needed to keep pace with an expanding population.
Westpac Banking Corp senior economist Satish Ranchhod said there had been "soft issuance" in Auckland in recent months, but the city experienced a strong rise in multi-unit dwellings in the latest figures.
"With the Unitary Plan having now cleared legal hurdles, it appears developers are coming back into the market. Nevertheless, with only around 10,000 consents issued over the past year, the level of issuance in Auckland still remains below what's needed to keep up with surging population growth in the region," Ranchhod said in a note. "We expect to see consenting and home building rising over the coming year."
Consents in Canterbury continued to taper off as the residential reconstruction effort slows, with 361 new permits issued in February, down from 525 a year earlier.
The value of non-residential building work rose 10 percent to $410 million in February from the same month a year earlier, while floor area consented shrank 13 percent to 189,000 square metres. On an annual basis, the value of non-residential work rose 5.3 percent to $6.09 billion while floor area shrank 18 percent to 2.63 million square metres.