National housing consents for February delivered a lift, primarily in Auckland, but longer term declines are raising concerns for the booming construction sector.
Otago was up in both volumes and values for February, gaining from 172 consents last year to 181 and up from $64million to $80million, Statistics New Zealand reported yesterday.
SNZ’s business indicators senior manager Neil Kelly said home building consents rebounded in February from January, but were only up slightly by 1.6% from February last year, at 2418 homes.
"In seasonally adjusted terms, this was a 14% increase from January 2017.
"However, this only partly reversed large falls in November and December," Mr Kelly said.
Overall South Island volumes and values declined for February; 786 homes last year declined to 638 last February, while the value declined from $258million to $243million.
For the year ended February, 30,162 new homes were consented nationally, including 10,045 for Auckland, both figures being the most for February data since 2005.
However, Mr Kelly said the trend for the number of new homes consented had fallen, after reaching a 12-year high in mid-2016, the decrease having been driven by Canterbury and Auckland.
Trends in other parts of New Zealand were also showing signs of flattening or decreasing, he said.
ASB senior economist Jane Turner said construction activity remained a key driving force of the country’s economic growth.
"The fall in dwelling consent issuance since late-2016 is concerning, given existing supply shortages, particularly in Auckland and Wellington," she said in a statement.
The weaker consents also presented a downside risk to our construction forecasts overall, but she expected strong housing construction to continue for at least another year.
"The February bounce-back was encouraging, but we still need to see further growth," Mrs Turner said.
Westpac senior economist Satish Ranchhod said with only about 10,000 Auckland consents issued during the year, issuance for the area still remained below what was needed to keep up with surging population growth in the region.
"We expect to see consenting and home building rising over the coming year," he said.
