New residential building consents are slowly rising in Auckland but declining in most of the rest of the country

Short headline: 
Building consents flat in February

The number of new residential building consents issued nationwide in February was almost unchanged compared with a year ago, although it was up 13.7% in Auckland.

Statistics NZ said consents were issued for 1758 new dwellings in February, including 160 apartments, which was down marginally on the 1768 new dwelling consents issued in February last year but up 14.2% on the 1542 consents in February 2013.

In Auckland, the country's largest housing market by far and the one that is facing the greatest housing pressures, consents were issued for 528 new dwellings, up 13.7% on the 464 issued in February last year.

However on an annual basis that is equivalent to less than 6500 new dwellings a year being built in the region, which is around half the estimated number of new homes required to keep pace with the region's explosive population growth.

With immigration levels continuing to run at record highs and new housing starts failing to keep up with demand, the latest figures suggest Auckland's housing market will continue to tighten.

Significantly only 84 of the consents issued in February were for new homes in Papakura and Franklin on the city's southern flank, where property values are lowest.

The biggest number of consents issued were for 149 homes within the boundaries of the former Auckland City Council, where property prices are high.

That suggests that very few of the new homes likely to be built would be affordable for first home buyers or people on low incomes.

Around the rest of the country, Christchurch was the only place where the number of consents issued was above 100, with 333 new dwelling consents issued in February, compared with 301 in February last year.

There were 84 new consents issued in Hamilton, 77 in Tauranga, just eight in Napier, 22 in Palmerston North, 22 in New Plymouth, 48 in Wellington City and 18 in Dunedin.

Statistics NZ said that after showing growth since March 2011, the number of new consents being issued was now showing signs of decreasing.

Nine of the country's 16 regions had fewer consents issued in February than a year earlier, with the biggest falls occurring in Taranaki, Otago, Bay of Plenty and Canterbury.

However the value of non-residential building work, which includes shops, offices, factories and public buildings such as schools and hospitals, was up strongly compared to a year earlier.

Consents were issued for $469 million of new non-residential building work in February, up 28.1% compared with the $376 million in February last year.

In a First Impressions newsletter on the building consent figures, Westpac senior economist Michael Gordon said the trend in building activity had noticeably softened in recent months.

"The decline has been most prominent in Canterbury," he said.

"Of course the finite nature of the post-quake rebuild means that the level of activity will eventually peak and decline, but we've had no feedback to suggest that that point has been reached already.

"Consents in Auckland have fared better, though volatile from month to month due to the greater prevalence of apartment unit consents in the region.

"However the pace of growth appears to be slowing and the number of consents is still well short of what's needed to meet population growth." 

Our free Property email newsletter brings you all the stories about residential and commercial property and the forces that move these huge markets. Sign up here.

To subscribe to our Property newsletter, enter your email address here. It's free.