The latest Statistics New Zealand data shows that 2,550 new dwellings were consented nationwide in September.
This was down on the 2,834 new dwellings consented in August and also down on the number consented in June and July.
However, annually, there has been an increase in new dwelling consents of 14% from the September 2015 year.
Within this, North Island consents numbers were up 25%, but South Island consents fell by 3.9%.
In Auckland, there was also a decline in new dwelling consents in September – with 752 consents issued, as compared to 970 in August.
While Auckland’s September consents total was a 14% increase on September 2015, it was still the second month consents in the supply-strapped city fell.
This trend is of some concern as migration jumped to new record highs in September and the majority of migrants head to Auckland – which puts further pressure on housing supply.
On top of this, legal challenges to Auckland’s Unitary Plan are set to impact on the development of new dwellings, particularly in many areas slated for greater intensification.
ASB senior economist Jane Turner said dwelling consents remained broadly flat nationwide in September.
Against a back drop of strong population growth, an ongoing sluggish housing supply response could still add additional pressure to house prices, particularly in Auckland, she said.
“Constrained supply growth would reinforce the need for the Reserve Bank to add further tools to its macro-prudential policy framework.”
But construction activity remains a key driving force of New Zealand’s economic growth, and the underlying trend in consent issuance suggests momentum will continue, Turner said.
“Stepping back from the monthly volatility, the trend remains one of broad-based increase across the country.
“Strong population growth has fuelled housing construction demand - although Canterbury consent issuance has resumed its downtrend as it winds down from the rebuild peak.”
Of more concern was the situation in Auckland where the market remains supply constrained despite the lift in housing construction, Turner said.
“Recent legal challenges to the Unitary Plan bring some uncertainty around its implementation. This could impact developers and potentially slow Auckland’s much-needed supply response.”
Westpac industry economist David Norman said new dwelling consents were broadly flat in September – up just 0.2% -- which was a little weaker than they forecast.
This follows on the heels of a very strong June result, and two consecutive falls in July and August, and, given the year-on-year increase, the trend continues to be upward, he said.
However, in Norman’s view, Auckland consent numbers were a little disappointing, with the annual total now nearing 10,000.
“It is too early for a big spike upward in the wake of more clarity on the Unitary Plan.
“We would expect to see a couple more months pass before parts of the city where greater intensification can now occur have more consents approved, appeals notwithstanding.”
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