Monthly building consent numbers have continued to ease, but percentage gains remain up for the year, despite a large fall in Canterbury house building.
Despite the annual gains, economists have mounting concerns about the construction sector facing increasing capacity constraints, the effect of banks' credit conditions and the slowing housing market in general.
On both value and volume, Otago was well ahead of the national average, with consent numbers on September last year up 14% to 188 and value up 17.6%, from $68 million to $80 million.
Nationally, volumes rose by 6% to 2770 dwelling and the overall value increased from $893 million to $1.03 billion.
Statistics New Zealand's prices, accommodation, and construction senior manager Jason Attewell said home consents had trended upwards recently, and were at levels last seen in 2004.
While Canterbury rebuilds meant its volumes were still at a historically high level, its number of new homes in September declined 18% on a year ago, to 5122 new homes, as the post-quake rebuild continued to wind down, Mr Attewell said.
For the year to September, Auckland booked an actual 2.9% rise in consents for 10,317 new homes, but when seasonally adjusted, an 11% decline was booked.
ASB senior economist Jane Turner said residential construction was still running short of what was needed to meet current population growth, let alone alleviate dwelling shortages in Auckland and Wellington.
``Election uncertainty, capacity constraints, credit conditions and a slowing housing market could be constraining house building demand,'' Mrs Turner said.
While the wider construction sector was booming, Mrs Turner said capacity constraints may be capping growth in non-residential construction activity.
She said while total consents had lifted in recent months, largely on the back of strong, albeit volatile apartment consents in both Auckland and Wellington, the consents for stand-alone houses had ``trended sideways''.
On the outlook for non-residential consents, Mrs Turner said there was a significant number of ``demand supports'' for that sector.
That included pressures on accommodation capacity, low vacancy rates for office buildings, strong demand for commercial and industrial properties and earthquake-related works.
``However, despite broad-based demand, non-residential construction output was weaker than expected over the first half of 2017, suggesting that [construction sector] capacity constraints could be constraining activity growth,'' she said.
Westpac senior economist Satish Ranchhod urged some caution on the latest data, especially around Auckland which had the greatest need for additional housing.
``If the current monthly pace were to be maintained, Auckland would finally start eating into its significant shortfall of housing,'' Mr Ranchhod said.
However, he noted some of the rise in Auckland consents appeared to be due to some large apartment developments, which would not be a recurrence in the future.
Additionally, there was anecdotal evidence of headwinds in the construction sector, with labour shortages and rising building costs, he said.
When applying a seasonal adjustment, Mr Attewell said the number of new homes consented fell 2.3% in September, compared with August, after having risen in each of the four previous months.
The annual rise in consents, up 3% to 30,892 new homes against the previous year, was despite the large fall in Canterbury, he said.
``The national increase was driven by townhouses and apartments, with slight falls for retirement village units and houses,'' Mr Attewell said.
