2 Apr 2014

Building under way where needed most

9:51 am on 2 April 2014

Housing construction looks set to get under way in the areas that need it most, the latest figures show.

Official figures show the number of new homes, including apartments, fell a seasonally adjusted 1.7 percent last month compared with January. Excluding apartments, the seasonally adjusted number of new dwellings rose 3 percent.

Canterbury consented 30 percent of the country's new dwellings, while Auckland was responsible for 26 percent.

The trend for the number of new dwellings, including apartments, is at its highest level since October 2007 but is still 29 percent below January 2004.

Westpac senior economist Michael Gordon said growth was driven by the regions where concerns about the supply of housing had pushed up house prices in recent years.

"The trend has been we've seen very strong growth in consents in the Canterbury region. Obviously that's reflecting the rebuild getting under way," Mr Gordon said.

"We're also seeing a general upward trend in consents in Auckland, although that has been patchy at times, but there some fairly strong numbers for February.

"That's necessary because it is one of the regions of the country where there does seem to be the most significant shortage of housing and, as a result, we've seen prices rising faster in Auckland than in the rest of the country."

The market mechanisms were now at work, albeit slowly, Mr Gordon said.

He believed the Reserve Bank would be pleased to see a pickup in housing supply but said it was still a gradual process and that there was a long way to go.

In fact, recent numbers suggested building in Auckland needed to rise by about 50 percent to address population growth, he said.

The value of building consents identified as earthquake-related in Canterbury was $81 million, out of a total value of $307 million for consents in the whole of Canterbury.