Drop in building consents for Otago but value rises

Auckland has surged ahead of the country with its residential building consents for July, while Otago had a flat result in both value and numbers.

There were 12,845 new homes consented in Auckland in the 12 months to July, up 28% on the year, but that was still tracking behind the 13,000 permits needed to keep up with population growth.

Around Otago, there were 282 consents in July last year, valued at $98million, and this year that declined to 250 consents, and the value was up slightly to $107million.

The number of North Island consents for July rose from 1831 a year ago to 2100, but in the South Island that plunged from 931 a year ago to 652.

Statistics New Zealand construction indicators manager Melissa McKenzie said seasonally adjusted, national consents in May rose 6.7%, in June they fell 8.2% and were down a further 10% for July.

"The number of new homes consented can be quite volatile on a monthly basis, particularly as the number of apartments consented tends to fluctuate a lot," she said.

ASB senior economist Jane Turner said while construction demand was "reasonably strong" in Auckland and Wellington, some regional areas appeared to have peaked already.

"We expect some regional divergence to continue over the next year, and on a nationwide level house building activity is likely close to a peak," she said.

The value of all residential building consents issued in the year ended July, including alterations and additions, was up 10% from $12.9billion last year to $14.2billion.

Westpac senior economist Satish Ranchhod said he expected home building activity would "remain elevated for an extended period".

"However, the construction industry has long highlighted difficulties with capacity and labour, which may provide some brake on how fast activity can ramp up to meet demand. Rising costs are also likely to be a challenge," he said.


 

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