Housing consents fall

Tuesday 31 August 2010

The residential property sector has slipped in July after edging into positive figures in the previous month, however commercial property development continued its precipitous decline.

By The Landlord

Consents for new buildings, excluding apartments, fell 5.3% last month, after a 1.1% rise in June, according to data released by Statistics New Zealand.

"The trend appears to have reached a turning point and has fallen in recent months following increases that began in April 2009," the department said.

When the volatile apartment category is included, the number of new housing units authorised rose 3.1%, following a 3.3% rise in June 2010. Retirement units accounted for 128 of the 203 apartment consents granted.

The value of residential building consents in July was $490 million, 11% higher than July 2009.

In contrast, the value for non-residential buildings fell $78 million, or 21%, compared with July 2009. This follows on from a 26% decline in June versus the same month in the previous period, as the commercial property develop sector continued its torrid year.

"The data add to the soft run of domestic data which, when combined with weakness offshore, suggest to us the Reserve Bank of New Zealand will take time out from lifting rates at both the September MPS and the October OCR Review," said Chris Tennent-Brown, an economist with Commonwealth Bank.

The biggest fall came from office and administration buildings, which dropped $59 million to $651 million, followed by education buildings, down $35 million to $620 million, and hotels and other short-term accommodation, down $25 million to $91 million.

The value of consents issued for all buildings last month was $783 million, a 3.6% decrease from a year earlier.

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