31 Jan 2013

Apartments lead rebound in housing consents

6:57 am on 31 January 2013

Building consents for new homes rebounded strongly at the end of 2012, as developers of apartments lodged more applications with councils.

Statistics New Zealand says consents for 1619 dwellings were approved in December.

Once seasonal factors are accounted for, the number was 9.4% higher than month before. Consent numbers had fallen in the previous two months.

The rebound in December came mainly from apartments, with consents for 232 approved compared with just 39 in November. Excluding new apartments, new housing consents fell 1%.

There were 432 consents issued in Auckland in December, unchanged from the previous month but nearly 50% more than the same month in 2011. The growth came mainly from outside central Auckland.

In all, 4874 consents were approved in the Auckland region. That is up on the number approved in 2011, but still well behind the 10,000 that needs to be built to keep up with population growth.

Consents in Rodney, Waitakare, and Papakura were up strongly. But in the more expensive areas of Auckland Central and the North Shore consents fell.

Deutsche Bank economist Darren Gibbs says a lack of finance for developers and a shortage of land means house building is failing to keep up with demand for new houses.

Westpac senior economist Michael Gordon says activity in Auckland and Canterbury led the rise in new homes.

He says consents for stand alone houses in Auckland have risen from about 200 a month two years ago to 400 a month.

Mr Gordon says there's clearly been a response to the fact that the Auckland market is quite tight, though consents are still down on the 800 a month a decade ago..

The Canterbury region, which includes Christchurch, had 116 new earthquake-related house consents worth around $45 million, down from $59 million in November.

Mr Gordon says while building activity remains strong in the region, rocketing commercial activity is outpacing new housing.

He says the bulk of rebuilding is likely to take place over the next couple of years.

Mr Gordon says there is a time constraint in terms of rebuilding in the central business district area because demolition of damaged buildings is not likely to be completed until the end of the year. But new buildings are going up in the outer ring of the city.