NZ home building consents fall for fourth straight month
By Jason Krupp
Nov. 30 (BusinessDesk) - New Zealand's residential property sector stayed the doldrums last month as the lacklustre pace of the economic recovery continued to put pressure on new building permits.
The seasonally adjusted number of new buildings authorised, excluding apartments, fell 1.1% to 1,096 in October compared to the previous month, according to data released by Statistics New Zealand. That's the fourth consecutive monthly decrease, and has seen the trend in the number of new dwellings slide 20% since March. Building permits are 46% lower that the June 2007 level, the peak in property market.
Including apartments, which are traditionally volatile, the number of new housing units authorised fell 2% to 1.154, following a 0.2% increase in the previous month.
“Dwelling consent issuance is weak implying that the recent pick up in residential construction activity is set to reverse into the latter parts of this year and into 2011,” said Phil Borkin, economist at Goldman Sachs & Partners New Zealand Ltd. “The poor state of the housing market is clearly weighing on activity and sentiment around the country.”
The wider property market has been in a slump this year as home sales stay a third below last year’s level, though prices have managed to hold up. Appetite for new housing has been muted as people continue to repay debt in a low interest rate environment.
The value of non-residential consents was $272 million in October, down 17% compared to the same month in the previous year.
Excluding the rebuild of Christchurch after the September earthquake, Borkin said he expects commercial construction issuance to stay in some a hole over the next 12 to 18 months.
Fewer consents were issued in 12 of New Zealand's 16 regions in October, compared to the previous Six of the 11 building types recording decreases in the month, led by social, cultural and religious buildings which fell $58 million in value, and office and administration buildings which fell $31 million. Factories and industrial buildings rose $25 million in value in October, and shops, restaurants and taverns rose $20 million.
For October, the total value of all building consents was $687 million, down 15% compared the same month last year.
The value of residential building consents was $415 million in October, down 14% compared to the same month last year. The trend has been declining since April, and has fallen 14% over this period.
Only four regions recorded increases, albeit small ones. In Canterbury, a small number of low-value consents were authorised related to the Sept. 4 earthquake, none of which were new dwellings.