Building consents tumble, ensures rates stay low

Seasonally adjusted consents for new residential buildings, including apartments, fell 17.8% in August, after a 2.4% increase in July, according to data released by Statistic New Zealand today.

Reserve Bank Governor Alan Bollard cited the weak housing market as a reason inflation will be restrained, when he kept the official cash rate at 3% this month, a level he has previously identified as being stimulatory to the domestic economy.

When the volatile apartment category is excluded, the number of new housing units authorised fell 8.9%, following a 6% decline in July 2010. Consents for apartments, which tend to leap about month-on-month, tumbled 96% to just 36, the lowest since February and down from 203 in July.

The value of residential building consents was $473 million in August, up 7.3% compared to the previous year, and is 32% lower than the June 2007 peak.

The value of non-residential building consents was $296 million in August, down 23% compared to a year ago.

Six of the 11 building types recorded decreases compared to the same month previously.

Social, cultural and religious buildings recorded the biggest decline, down $77 million, followed by hospitals and nursing homes, down $20 million, and education buildings, down$11 million.

The value of consents for all buildings fell 6.6% to $769 million compared the previous period.