Otago and Southland dwelling consents rose sharply in July, both regions exceeding the nationwide 20% rise.
Consents in Otago rose 20.6% to 152 in July from 126 in June and Southland consents rose 150% to 25 from 10.
In money terms, the Otago consents rose 17% in value in July to $56 million from $48 million and Southland consents rose to $7 million from $3 million.
In a breakdown of territorial authority dwelling consents issued, Dunedin had more than a 100% rise to 35 issued in July compared with 17 in June and 39 in May.
Invercargill had 12 issued in July, from three in June and nine in May. Central Otago was down slightly to 18 in July from 22 in June but was up against the previous eight months.
Queenstown Lakes was up nearly 12% to 85 from 76 in June and 87 in May.
Statistics New Zealand figures released yesterday (Monday) said 2824 consents were issued for dwellings in New Zealand in July.
Houses were up 215 to 1799 compared with July last year, apartments were up 249 to 444, retirement village units were down 156 to 117 and townhouses, flats and units were up 234 to 464.
For houses only, the trend had more than recovered from recent falls and the current level was double the series minimum in March 2009.
The regions with the largest increases were: Auckland, up 267 to 1116; Waikato, up 85 to 296; Bay of Plenty, up 56 to 181; and Canterbury up 41 to 650.
However, while it seems New Zealand is on something of a building boom, ASB economist Chris Tennent Brown thinks construction activity in New Zealand is likely to peak this year and no longer be a strong contributor to economic growth.
Further interest rate cuts from the Reserve Bank were likely to stimulate housing demand and remain supportive of construction demand, he said.
''We continue to expect the Reserve Bank to cut the OCR to 2.5% in coming months. We have pushed out the time of when the OCR will return to a more neutral level to 2018 from 2017.''
The Reserve Bank had altered its OCR schedule from the second half of next year. Taking the new schedule into account, the ASB had a working assumption the central bank would lift the OCR in 2018 by 0.25% at each of the May, August and November Monetary Policy Statements to 3.25%, he said.
''Although financial markets will remain heavily focused on how low the OCR will go in the near term, for decision making with long term horizons, a view on the sustainability of low interest rates is important.
The new announcement schedule meant there would be a relatively long gap between early November and February with no rate announcements scheduled.
In the long term, the November and February announcements might take on more significant than the other five OCR announcements, Mr Tennent Brown said.
In Australia, the annual rate of inflation is staying well below the Reserve Bank's 2% to 3% target, but the bank is unlikely to take the option of cutting the cash rate.
