Trend now positive for consents

Once seasonally adjusted, the number of new dwellings consented in March was down 1.8% on February – but that dip came on the back of a 17% increase in consents in February.

Further, the total of 2,779 new homes consented in March was up 20% compared with the total at the same time last year.

In the year ending March 2017, 30,626 new dwellings were consented – including 10,199 new dwellings in Auckland.

This figure was up 10% on the previous March year and was the most for a March year since 2004.

Statistics New Zealand said the trend for the number of new dwellings consented is showing signs of increasing again, following a decrease towards the end of last year.

Economists welcomed the new data, but warned that supply constraints are still very much at play in the housing market.

ASB senior economist Jane Turner said dwelling consents appear to have stabilised and begun to recover over recent months. 

“Strong population growth has lifted housing demand right across New Zealand, but supply challenges remain most acute in Auckland and Wellington.”

She added that the change of direction in the trend was encouraging and ASB expects strong housing construction to continue at least for another year.

For Westpac senior economist Satish Ranchhod, the slight dip in consents in March was an expected pull back following on from February’s surge.

He said today’s consent data left them with a positive outlook for building over the coming year – especially as building levels in Auckland and Canterbury actually rose.

“In Auckland, consent issuance was up around 4% over the month, building on the roughly 20% gain last month.

“This reinforces our expectation that we will see building levels in Auckland rising over the coming year in response to strong economic incentives and the demands of a growing population.”

Ranchhod said it was notable that much of the month’s increase relates to multi-unit consents (eg: apartment and townhouses).

This potentially reflects increased activity from developers now that the Unitary Plan has cleared its legal hurdles, he said.

“With a bit over 10,000 new dwellings consented in Auckland over the past year, building and issuance remains lower than what’s needed to keep up with surging population growth in the region.

“However, we expect to see consenting and home building in Auckland to continue rising over the coming years.”

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