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NZ building consents sink to lowest since April 2009

NZ December residential building consents hit lowest level since April 2009

By Jason Krupp

Jan. 31 (BusinessDesk) - New Zealand's residential construction sector continued to shrink in December, with building consents falling to their lowest level since April 2009, the sixth straight month of declines.

According Statistics New Zealand data released today, the number of new residential dwelling units approved in the month, excluding apartments, fell 11.3% to 943 on a seasonally adjusted basis compared the same month in the previous year.

Once the highly volatile apartment category is factored the total number of residential consents issued in December fell 18.6% to 1018, with 85 new units added in the month, down 8.6% from the previous year.

The softer figures match a slump in residential property sales in December, with the median house price down 2.2% to $352,000 compared to the same month in the previous year, according to Real Estate Institute data.

The weaker housing market was one of the factors behind central bank Governor
Alan Bollard's decision to maintain the official cash rate at 3% last week, a level which the market is betting will be maintained until the third quarter of this year. The bank is forecasting property values will extend their modest decline this year.

Fewer new dwellings were authorised in 13 of New Zealand's 16 regions in December compared with same month last year, with Auckland leading declines, down 120 units to 193, followed by Canterbury, down 69 units to 167. Only Bay of Plenty and Gisborne showed small increases, with no change in the West Coast region.

The value of residential building consents in the month fell 26% to $368 million compared to the same month previously, the lowest level since early 2009. The trend has been declining since April last year, and declined 20% over the period.

The value of non-residential building consents fell 17.8% to $332 million in the month compared to December 2009, reversing a 23% increase in November.

Six of the 11 building types recorded decreases in value, with hospitals and nursing homes down $74 million, storage buildings down $26 million, and offices and administration buildings down $23 million.

Education buildings, which accounted 33% of total non-residential values, showed the biggest appreciation, up $34 million. That follows from November, where spending on education facilities Education buildings lead growth, up $72 million compared to the same month last year.

(BusinessDesk)

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