HOUSE CONSENTS PLUMMET
Building consents have suffered their worst month in nearly 12 years, after lockdown put the brakes on the thriving house building sector.
Residential consents for houses and townhouses plunged by 21 per cent in March, the biggest monthly fall since October 2008, during the global financial crisis.
Prior to that, the residential market was steaming along, up 5.7 per cent in February as the Auckland market caught a fresh wind.
Builders are now largely back at work under strict social distancing measures, but the industry is worried about the months to come and the prospect of some consents being shelved.
‘‘Once the dip over, a sharp rebound is inevitable.
‘‘But a weakening trend is also expected to prevail for some time on the other side of this,’’ ANZ senior economist Liz Kendall said.
Consented non-residential work also fell, down 10 per cent month on month.
Weak housing demand and investment could expose companies with profitability and productivity challenges that were masked by the good times, she said.
Auckland and Canterbury suffered the least, with only a 5.3 per cent fall in consenting. In the rest of the country, consents tumbled 38.3 per cent.
Annually, consents were at 37,440, the highest level of house building work in years.
ASB senior economist Jane Turner said the fall in approvals was understandable given the lost of four business days in March.
As the year wore on, there would likely be a sharp fall in house prices, and some projects might be cancelled.
However, ‘‘this fall in private sector demand will free up some spare capacity in the construction sector.
‘‘Later this year may prove to be an opportune time for the Government to ramp up its own construction plans for both housing and non-residential building,’’ Turner said.