The number of building consents issued for apartments
rebounded strongly in November, hiding a fall in consents
issued for other dwellings.
Statistics New Zealand figures showed dwelling consents in
November were up 11.1% in the month and 36.7% on November
last year. Excluding apartments, dwelling consents fell 0.5%
over the month.
There was a strong rebound in Auckland dwelling consents
following weak results in recent months.
Statistics NZ highlighted the number of apartments consented
in Auckland in November which made up 268 of the 492
apartments consented nationwide.
Excluding apartments, 79 more dwellings were consented in
ASB economist Christina Leung said the result was ''very
encouraging'' given signs over much of the second half of
2013 that house building demand might have slowed in
''Business surveys indicate a rebound in confidence and
activity outlook in the construction sector over November and
December, particularly in regards to residential
The Reserve Bank announced in December it would exempt new
residential construction loans from the loan-to-value (LVR)
restrictions. The exemption covered loans to finance the
construction of a new house only and did not apply to the
purchase of a newly-built house.
Ms Leung said there were anecdotes from building companies
the restrictions on high LVR lending was discouraging house
Households were worried a top-up in mortgage borrowing would
be required, should unexpected additional building costs be
incurred once the project had started.
The Reserve Bank acknowledged the problem in its earlier
analysis that reduced construction of new houses might be an
unintended consequence of LVR restrictions.
''The exemption is likely to support a continued improvement
in house building demand in Auckland over the coming months,
given the acute housing supply shortages in the region.''
Statistics NZ estimated earthquake-related consents totalled
$40 million in November, of which $36 million was for
residential building work. The remaining $4 million was for
non-residential building work.
Ms Leung said consents for earthquake-related work had been
steady over the second half of last year, indicating the
Canterbury rebuild remained on track Work identified as
earthquake-related captured only work to repair or rebuild on
affected sites and did not include replacement houses built
on different sites.
''We expect the earthquake rebuild in Canterbury and stronger
house building demand in Auckland will drive construction
growth over the coming years.
''The extent to which this increase in construction activity
will flow through to capacity pressures will be a key factor
the Reserve Bank pays close attention to.
''We expect that as construction activity gathers further
momentum, and underpins New Zealand economic growth, this
will prompt the Reserve Bank to lift the official cash rate
in March,'' she said.
The OCR is currently 2.5%, the same as Australia. The Reserve
Bank of Australia is likely to cut its cash rate further this
year while the New Zealand central bank is expected to move
upwards by 2% in the next 18 months.
In Australia, the number of home-building permits fell in
November, a second month of falls that increased concern over
the strength of a rebound in housing construction.
Approvals to build or renovate houses and apartments fell
1.5% from October, the Australian Bureau of Statistics said
yesterday. Approvals earlier fell 1.6% in October from
Housing was seen as one of the few areas of strength in the
Australian economy as a long resources boom cooled. The
central bank has cut rates eight times since late 2011 in a
bid to spur activity in areas such as retail and housing that
have led previous expansions.