Building consents plummet

The fall was driven by a decline in approvals for apartments which were down 75% over the year. Residential building approvals, excluding apartments, fell 2.7% in March, and were 4% lower than a year earlier.

While the building approval numbers have been volatile and there may have been some negative impact from changes in fees. In March 2005 there was a boost to consents as a builders got in applications before a new an increase to in building levies and other fees on April 1.

"This should be noted when comparing the figures for March 2006 with March 2005," Statistics said.

The latest numbers are being interpreted as growing signs of weakness in the housing market.

“We maintain that residential approvals will continue the weakness experienced in the second half of 2005 throughout the remainder of 2006, given the lagged effects of tighter monetary conditions and evidence that property prices have eased,” Macquarie Bank associate economist Annette Martins says.

“The data has started showing signs of weakness in the housing market. However, given that the month-to-month data is somewhat volatile and the yearly growth rate is affected by changes to the legislative environment as at March 31, 2005, next month's data should confirm the true extent of the housing market slowdown,” Martins says.