Decline in residential building consents

New building consents around most of the country declined in February – although Auckland recorded an increased number of consents.

Tuesday, March 31st 2015, 12:00AM

by Miriam Bell

According to new data from Statistics New Zealand, the number of consents issued for new residential building was 0.6% lower in February than it was last February.

In February 2015, 1,758 new residential buildings (including 160 apartments) were consented.

However, when seasonally adjusted, new residential building consents, including apartments, decreased by 6.3%. This follows a 4.6% decrease in January 2015.

When apartments were excluded, the seasonally adjusted number of new residential building consents fell by 1.4%. This follows a 7.8 percent decrease in January 2015.

Statistics New Zealand business indicators manager Neil Kelly says the trend for new residential building consented has more than doubled since the series minimum in March 2011.

‘But it is now showing signs of decreasing after generally increasing for almost four years.”

Nine of the 16 regions consented fewer new residential buildings, including apartments, in February 2015 than in February 2014.

The regions with the largest decreases were Taranaki, Otago, Bay of Plenty and Canterbury.

The Auckland region recorded the largest increase of new residential building consents. It was up 64 to 528, including 70 more apartments.

Westpac senior economist Michael Gordon says the trend in building activity has noticeably softened in recent months.

The headline figure was dragged down by an expected pullback in apartment unit consents from unusually high levels, but ex-apartment consents were weaker than expected, he says.

“We had assumed that the 7.8% fall in January was a temporary product of the New Year lull, but instead it was followed by a 1.4% decline in February.”

He says that consents in Auckland have fared better – although they are volatile from month to month due to the greater prevalence of apartment unit consents.

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

Gordon adds that the value of non-residential building consents rebounded from its usual January lull and maintained its double-digit pace of annual growth.

According to the Statistics New Zealand data, the value of non-residential building work consented in February 2015 was $469 million, up $93 million (25%) compared to February 2014.

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