Building consents keep falling - 20% downsince March

New housing consent numbers kept falling in October, with the latest statistics showing showing a 20 per cent fall since March this year. The seasonally adjusted number of new housing units authorised - excluding apartments - fell for the fourth consecutive month, dropping to its lowest point since July 2009, said Statistics New Zealand.

Goldman Sachs economist Philip Borkin said the poor state of the housing market was clearly weighing on activity and sentiment around the country.

"We suspect that it will not be until quarter one, 2011 that dwelling consents slowly starts to pick up in response to quake repair work."

When the volatile apartment category is included in the figures, the trend is similar - a fall of 18 per cent since April 2010.

In October 2010, without adjusting for seasonal effects, consents were issued for:

- 1,123 new housing units, including apartments,
- 1,099 new housing units, excluding apartments
- 24 new apartments.

The value of consents issued for residential buildings was $415 million in October 2010, down 14 per cent compared with October last year.

The value of non-residential buildings also fell, dropping by 17 per cent to $272 million.

In Canterbury, a small number of low-value consents authorised in October 2010 were related to the earthquake, said Statistics NZ. None of these were for new dwellings.

ASB economist Chris Tennent-Brown said he expected building consent data would be significantly affected by the Canterbury earthquake for the next year.

"With weak population growth and a low level of activity in the housing market, there is little in the way of a catalyst beyond the earthquake to stimulate a pick up in residential activity."

The RBNZ outlook in the September MPS included weak business investment forecasts and cautious households.

"We expect this to be reinforced in the latest RBNZ forecasts in the December monetary policy statement.

"We do not expect the RBNZ to resume the process of returning monetary conditions to normal levels until March 2011."

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Posted: 30 Nov 2010

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