Housing consents weakness intensifies

Friday 29 October 2010

The residential property sector remained soft in September, measured by building consents, with the effects of the Canterbury earthquake adding to the woes of the struggling residential construction sector.

By The Landlord

The seasonally adjusted number of new residential buildings authorised, excluding apartments, fell 2.6% to 1,104 in September compared to the previous month, the lowest level since July 2009, according to data release by Statistics New Zealand today.

The housing market remains "in the doldrums," Goldman Sachs economist Philip Borkin says. Issuance and construction "looks set to remain lacklustre."

The trend for new dwellings, excluding apartments, has been falling since March, following increases that began in 2009. The current level is 43% lower than the June 2007 level, a benchmark before the global financial crisis.

"The earthquake on September 4 has had an impact on building consents issued in Canterbury," the department said.

"The most affected territorial authority offices were closed temporarily, and the number of consents they authorised was lower than average. Only a handful of consents authorised in September were earthquake-related, and none were for new dwellings."

When the volatile apartment category is included, the number of new housing units authorised rose 0.5% to 1,183, following an 18% decline in the previous month. The value of residential building consents was $450 million in September, down 6.2% compared with September 2009.

Fewer new dwellings were authorised in six of New Zealand's 16 regions in September compared with the same month last year. The three regions with the largest decreases were Auckland, down 119 units, Canterbury, down 68 units, and Waikato, down 31 units. Wellington region has the largest increase in consents, up 27.

The value for non-residential building consents was $365 million in September, up 42% compared with the same month last year.

Seven of the 11 building types recorded increases in the value of consents, led by hospitals and nursing homes, up $65 million, and office and administration buildings, up 19 million. Hostels and other short-term accommodation led declines, down $17 million.

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