29 Jul 2016

Building consents hit 12 year high

1:48 pm on 29 July 2016

Building consents are up, led by permits for apartments in Auckland and retirement units in Lower Hutt.

Housing construction in an East Auckland suburb

Photo: RNZ / Claire Eastham-Farrelly

After little growth in recent months, official Statistics New Zealand figures show permits rose a seasonally adjusted 16 percent in June compared with May.

A total of 2752 new homes were consented last month, up 35 percent from the same period a year ago, including 1863 new stand-alone houses.

ASB senior economist Jane Turner said the strong June figures provided some relief.

"The trend in residential consent issuance growth had been slowing over the first half of the 2016. However, the lift in June consents is an encouraging sign that building demand is continuing to grow," Ms Turner said.

Annual housing consents hit their highest level in over a decade.

ASB Senior Economist Jane Turner.

ASB Senior Economist Jane Turner. Photo: Supplied

"The annual total of 29,097 is the highest for a June year since 2004, when it was more than 33,000," Statistics New Zealand business indicators manager Clara Eatherley said.

"Auckland and surrounding regions were the main contributors to this growth. Canterbury's total decreased over the year, but remains at a historically high level."

Westpac's industry economist David Norman said all eyes were now on Auckland Council following the Unitary Plan recommendations, that allows for over 420,000 dwellings to be built in the region over the next 30 years.

"This suggests the potential for a further strong uptick in Auckland home-building is there, but we must wait and see how many of these proposals are approved by Auckland Council before we can be confident that the shortfall of 30,000 dwellings (and growing) in Auckland can be addressed with even greater speed," Mr Norman said.