Building consents continued to rise in September but the Registered Master Builders Federation remains concerned about future building activity as loan-to-value (LVR) ratios start to bite.
The Reserve Bank LVRs came in on October 1 as the central bank tried to dampen down housing activity. Retail banks are reporting fewer mortgages being issued at less than a 20% deposit.
Statistics New Zealand figures show 1860 new home and apartment consents were issued for the month, the third highest month of the year.
The September figures were bolstered by a record month in Canterbury, where 599 consents, valued at $60 million, were issued - the highest in the region since records began in 1976.
Federation chief executive Warwick Quinn said the overall result was positive and showed the rebuild in Canterbury was under way.
The national growth was being driven by Canterbury and Auckland, which now had 58% of all new home activity. Activity in those two markets had been growing steadily for the last 12 months to 18 months and was expected to continue.
''While we like to see the consent figures rise, we have to be careful not to get carried away with the increase without appreciating the vagaries within it.
"We have been predicting for a couple of years now 'the tale of two cities', with Auckland and Canterbury dominating the new home construction. This is playing out now, well and truly.''
Regions were faring better but it was still tough in the South Island outside Canterbury. Mr Quinn was concerned about the impact of the Reserve Bank's LVR policy on new home construction activity in coming months.
He was aware of building companies whose inquiry levels had dropped significantly and potential clients had been lost as they were unable to obtain finance due to insufficient deposits.
''While the banks will still lend on new construction, it appears many potential new-build clients are either not able to obtain mortgages, or now no longer believing building is an option and not bothering to inquire.''
The impact of LVRs would not be immediately apparent, as statistics for consents had been locked in for several months. For LVR policy to be effective, supply must be maintained.
Any reduction in supply was counterproductive to keeping a lid on property prices, Mr Quinn said.
G. J. Gardner, one of New Zealand's largest home builders, said the loan restrictions had cost it 24 new-home builds in the first month alone and it expected more.
The firm's 27 franchises built 700 homes last year and expected to build 950 this year. But 11 franchises confirmed they lost a total of 24 deals as a direct of the LVR restrictions.
Westpac senior economist Michael Gordon said the pace of consenting in Christchurch had clearly taken a step up in the last months, perhaps reflecting Government pressure to speed up the rebuild process.
''In contrast, consents in the under-supplied Auckland market remain worryingly subdued. While the number of consents in September was up 7% on the same time last year, the pace has slowed markedly in recent months.''
