Consents trend recovering

Once seasonally adjusted, the number of new dwellings consented was up by 7.0% in May, after a 7.4% fall in April.

This means May saw a total of 2794 new dwelling consents, including consents for 2,039 stand-alone houses, issued.

Statistics New Zealand spokesperson Jason Attewell said the trend for new dwellings is recovering after dipping in late 2016.

“It's more than double the level of the 2011 low point, and nearly back to the mid-2016 peak."

In the year ended May 2017, 30,645 new dwellings were consented, and about one-third of these were in Auckland, Attewell added.

The apparent recovery in new dwelling consents, after the unexpected fall in 2016, has been welcomed by economists.

ASB senior economist Jane Turner said the lift in consents was particularly strong in Auckland, Wellington and Christchurch.

The lift in Auckland and Wellington consent issuance was particularly encouraging, she said.

“This is because both regions are suffering supply shortages as housing construction has not kept up with population growth in recent years.”

Turner said strong population growth has lifted housing demand in many parts of the country and ASB expects strong housing construction to continue for at least another year.

“Very high levels of construction demand will continue to fuel construction inflation. But growth in the housing supply reduces the risks around housing inflation reaccelerating in Auckland.”

Westpac acting chief economist Michael Gordon said the annual total for Auckland consents rose to 10,379, which was a new high for the current cycle.

“However, the pace remains well short of what’s needed to match population growth.”

It is generally estimated that Auckland has a shortage of around 35,000 homes and needs to have 11,000 to 12,000 built each year for supply to keep pace with demand.

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