1 Nov 2013

Construction level still low - economist

7:45 am on 1 November 2013

An economist says the overall level of construction is still fairly low and there is a lot of capacity in the sector.

Official figures show the number of new residential consents rose a seasonally adjusted 1.4% in September, compared with the previous month.

More than 1800 new homes were consented during the month, including 156 apartments, 97 of which were retirement village units.

In Canterbury, 599 new dwellings, including apartments, were consented, the highest number on record for Canterbury.

Westpac senior economist Michael Gordon says he is keeping an eye on Canterbury and Auckland where there are obvious supply constraints.

He says nationwide it is still a long way from the construction peaks seen during the last decade.

Mr Gordon says there is still capacity but that is expected to change.

He says the rebuilding of Christchurch will use capacity, and construction is gradually picking up in other parts of the country.

Mr Gordon says although Auckland house prices have risen, which is a signal for people to build more, there are other factors, such as the availability of land and uncertainty about whether the upturn will be sustained, which appear to be moderating the pace of building there.