Consents strongest in decades
Building consents for houses have hit their highest annual level in 46 years, raising hopes it may help deflate the housing bubble.
Some 37,981 new homes were consented in the year to October, boosted by more townhouses, flats, and units, Statistics NZ data shows.
That was up 2.8 per cent from last year, but still shy of the all-time annual high of 40,025 in February 1974. Construction statistics manager Michael Heslop said it was the first time in decades that housing consents had come so close to the 38,000 mark.
Infometrics economist Andrew Beattie said that with house prices currently rising 15 per cent a year, the booming housing market was giving property developers a clear incentive to build more housing.
‘‘This time last year residential consent growth was quite strong, so to be still increasing from that point one year on is quite remarkable given the recession and pandemic,’’ Beattie said.
Consents were also strong for the October month, up 8.8 per cent on a seasonally adjusted basis, following a 3.6 per cent rise in September. The exceptions were tourist hotspots in the South Island, which had the potential for house price falls, Beattie said.
October’s figures also highlighted a continued trend away from standalone housing and towards townhouses, Infometrics said. Some 1178 consents for townhouses were issued, up 43 per cent, while standalone houses fell 4.8 per cent, defying a 6.3 per cent rise in September.
While residential building was robust, economists suggested the commercial building sector was being propped up only by public sector work. Non-residential consents fell to a five-month low of $510m, and were down 9.1 per cent for the October year.
Smith said consents for accommodation had held up remarkably well considering, and the coming summer would provide a clearer indication of the state of demand. Infometrics economist Paul Barkle said non-residential building was beginning to soften as expected. Private building consents were deteriorating rapidly, down 0.8 per cent in the three months to October compared with the previous year.
Barkle said accommodation consents were weak due to the lack of tourism and retail was awaiting the results of Christmas. Consents were weakest for hostels and hotels (down 23 per cent or $70m) compared with 2019’s figures.