By Rebecca Howard
July 2 (BusinessDesk) - Townhouses boosted New Zealand residential building consents to their highest level in 45 years.
Seasonally adjusted residential permits rose to 3,173 in May, up 13 percent from April when they fell 7.9 percent, Stats NZ said.
In actual terms, there were 3,687 homes consented in May, up 8.2 percent from a year earlier.
Of those, 1,984 were stand-alone houses while 919 were townhouses, flats and units. The stand-alone houses were down 8.4 percent versus the same month a year earlier while approvals for townhouses were up 73.1 percent.
Townhouses helped drive the number of new homes consented to their highest level since since May 1974 when 3,786 were consented, Stats NZ said. The population of New Zealand in the 1970s was around 3 million compared with almost 5 million today.
“A significant increase in the number of multi-unit home consents such as townhouses drove growth in new homes consented this month,” construction statistics manager Melissa McKenzie said.
She added, however, the number of homes consented each month can vary significantly due to the timing of large projects like townhouses and apartment buildings.
New Zealand's building sector remains inundated with work, despite an escalation in costs eroding profit margins and tipping several firms into liquidation or receivership.
"We believe house-building activity is likely close to a peak, but we expect residential construction activity to remain at high levels over 2019 in order for housing supply to make up the shortfall which has emerged in recent years," ASB Bank senior rural economist Nathan Penny said.
In the year ended May, the actual number of new dwellings consented was 34,672, up 6.3 percent from the May 2018 year.
Of those, permits for new houses rose 1.6 percent to 21,478, apartments rose 1.9 percent to 3,942, retirement village units rose 9.5 percent to 2,277, and townhouses, flats and units increased 25.8 percent to 6,975.
Meanwhile, the value of non-residential work fell 11.2 percent on the month to $584 million in May, with the 334,000 square-metres up 4.7 percent from a year earlier.
Non-residential work permitted totalled $7.45 billion in the year to the end of May, up 9.5 percent. It spanned 3.64 million square-metres, an increase of 19.5 percent.
"There are no signs of a slowdown in commercial construction despite weak business confidence levels seen over the year," said Penny.
A seasonally adjusted net 31 percent of firms surveyed in the New Zealand Institute of Economic Research's June quarterly survey of business opinion expect economic conditions to deteriorate during the coming months, compared to a net 28 percent who were pessimistic in the prior quarter. Within the building industry, a net 33 percent expect a deterioration versus a net 25 percent who did in the prior survey.