Building consents hit record

Building consents paused for breath in March, but managed to hit a monthly record of $2 billion.

About $1.2b was for residential building work, which eased 1.8 per cent in March, following a strong 17 per cent rise the previous month.

Dwelling consents are up 20 per cent for the year, and seem to have stabilised after some wobbles in 2016, economists said.

Strong population growth had lifted housing demand in many parts of the country, ‘‘and we expect strong housing construction to continue at least for another year,’’ ASB economist Jane Turner said.

Infometrics’ Mieke Welvaert was less convinced, saying financing and other constraints would see consents dip for a period, potentially until next September.

‘‘Rising building costs suggest that there will still be downward pressure on consent demand over the next few quarters,’’ she said.

Outside Auckland and Canterbury, there were widespread declines, particularly in Hawkes Bay and Manawatu. However, Auckland consents grew 4 per cent over the month.

Much of it was for multi-unit dwellings such as apartments and townhouses, reinforcing Westpac’s expectation that strong economic incentives and population growth would keep house building steaming along.

It was imperative Auckland stayed on track, given it had consented just over 10,000 new dwellings in the last year, failing to keep up with population growth, Westpac’s Satish Ranchhod said.

Canterbury too had improved, appearing to find its feet now that the residential rebuild had peaked.

Non-residential building also hit a new monthly record of $837m, nearly double the usual amount.

This included a $167m lift in hotel and motel work to address a dire shortage of accommodation.