Housing consents still high

Nick Smith
Nick Smith
Strong house-building demand in both Auckland and Canterbury meant dwelling consents issued in July held up at high levels.

Both cities are targets for political housing announcements with National and Labour focusing on different ways to get first-home buyers into affordable housing.

Statistics New Zealand figures for July showed dwelling consents issued were up 1% in July from June, but 20.5% for the year ended July.

However, Auckland consents were thought to have increased 23% in July on a seasonally adjusted basis.

Although Canterbury consents were thought to have fallen 15% in July, this followed a strong result in June.

For the year to July, Canterbury dwelling consents issued increased 42% on the same period last year.

Housing Minister Nick Smith claimed the statistics showed Government housing reforms were working.

''We are increasing land supply and speeding up consent processes through our housing accords and special housing areas legislation. In Auckland alone, we have so far announced 63 special housing areas with a potential yield of 33,500 houses.''

Dr Smith expected to make an announcement on the fourth tranche of special housing areas in coming weeks.

Labour is promising to build 100,000 modern homes over 10 years through its KiwiBuild programme and National is promising to help 90,000 first-home buyers through KiwiSaver changes.

ASB economist Christina Leung said she continued to expect house-building demand in Auckland and Canterbury would drive construction growth over the next couple of years.

Statistics NZ estimated Canterbury earthquake-related consents totalled $126 million in July, of which $84 million was for residential building work and $42 million for non-residential work.

It was estimated $2.1 billion of earthquake-related consents had been issued since September 2010.

The work identified as earthquake-related only captured work to repair or rebuild on earthquake-related sites and did not include replacement buildings on a different site, Ms Leung said.

''The continued increase in non-residential building consents in July is another positive development.''

The increase in July was led by stronger demand for new office buildings and retail outlets. With businesses showing increasing optimism towards investment, that was likely to flow through to a continued improvement in commercial building demand over the coming year, she said.

Looking at the implications of the latest data, Ms Leung said the July data highlighted the positive developments in the construction sector.

House-building demand remained strong, led by Auckland and Canterbury and higher business confidence was finally translating through to increased demand for commercial buildings following soft demand over much of 2013.

''We expect strong house-building demand in Auckland and Canterbury will drive construction growth over the next couple of years. Added to that will be increased demand for non-residential construction, reflecting the continued improvement in business confidence.''

The ASB expected the Reserve Bank to hold the official cash rate at its current level of 3.5% until March next year.

 

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