31 Oct 2016

Annual building consent numbers hit decade high

3:18 pm on 31 October 2016

The number of building consents rose fractionally last month, the first gain in three months, but the annual rate was the highest in more than a decade.

14072016 Photo: Rebekah Parsons-King. Hobsonville is booming. Around 20% of the homes being built here will be affordable homes.

A construction project in Hobsonville, Auckland. Photo: RNZ / Rebekah Parsons-King

Official figures show a seasonally adjusted rise of 0.2 percent in September from the month before, snapping two months of falls.

"But with issuance only partially retracing the 20 percent month-on-month surge in June, the level is still healthy," ANZ senior economist Philip Borkin said.

"In three-month annualised terms, total issuance is running at a decent 31,500 pace."

Excluding the volatile apartment sector, consents for new houses fell 2.5 percent.

But on an annual basis, the number of consents rose by 14 percent to 29,935 in the year to September, the highest total since March 2005.

"All nine North Island regions consented more new dwellings in the latest year ended September than in the previous one," Statistics New Zealand business indicators senior manager Neil Kelly said.

"This was led by Auckland and nearby regions."

In Auckland, annual permits are now close to 10,000 although that is still too low to satisfy demand for housing.

Analysts are questioning the ability of Auckland's building sector to expand quickly.

"The trend there [Auckland] is rising, but the pace of that growth has softened a little in September," Mr Borkin said.

"It's probably far too early to put too much on that, but we're certainly hearing anecdotes about capacity constraints and cost pressures making it hard for the industry to continue to grow strongly and perhaps we're starting to see some signs of that."

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