The prospect of higher interest rates appears to have hit the demand for new housing, which has continued to slow in recent months.
The Reserve Bank this month increased its official cash rate to 2.75% and retail banks promptly lifted mortgage lending rates.
The central bank is expected to increase its cash rate on July 29.
Consents for new dwellings, excluding apartments, fell a seasonally adjusted 9.5% in May after rising 13.4% in April, Statistics New Zealand (SNZ) says.
Figures published yesterday show 1360 dwellings were authorised last month, up 9.9% from a year earlier.
Last month's total included 27 apartment units.
When those apartments are included in the seasonally adjusted tally, new dwelling consents were down 9.6% in May after rising 8.4% in April.
The value of residential building consents in May was $481 million, 18% higher than a year earlier, SNZ said.
ASB economist Jane Turner said recently announced tax changes had reduced the attractiveness of investment property on the margin.
Population growth would also provide less support to housing demand over the next year.
The pace of permanent arrivals had slowed in the past year, while permanent departures had started to increase.
The outlook for the construction industry remained subdued, she said.
Domestic-led drivers of economic growth were likely to be less of a force next year.
