Building consents for new houses, excluding apartments, rose 1.3% in March, according to Statistics New Zealand

Building activity surged again in the past month, with the most consents issued for new non-apartment houses in a month since November 2007.

Statistics New Zealand reporting that seasonally adjusted consents for new houses - excluding apartments - rose by 1.3%. On a non-seasonal basis, the 1813 houses approved was the most in a month in over six years.

The rise in building activity follows a 3% rise in February.

Figures on new appartment approvals can be extremely volatile from month to month, but in March there was a big surge in numbers.

Including apartments, the seasonally adjusted number of new dwellings consented rose 8.3% following falls in the previous two months.

In unadjusted terms, 1,999 new dwellings were consented. This comprised:

• 186 apartments, including 110 retirement village units
• 1813 houses (the highest number since November 2007).

The regions that consented the most new dwellings were:

• Canterbury – 604
• Auckland – 561 (including 61 apartments)
• Waikato – 232 (including 67 apartments).

A total of $1.2 billion of building work was consented in March, with $800 million of residential work and $422 million of non-residential work.

ASB economist Christina Leung said the "rebound" in dwelling consent issuance was encouraging, "particularly given the rebound in consent issuance in Auckland following some soft results over early 2014".

"With the annual total of dwelling consents issued in Auckland still below the 9000 houses we estimate will be required each year to keep up with population growth over the next couple of years, a further ramp-up in house-building activity is likely.

"We continue to expect stronger house-building demand in Auckland and the earthquake rebuild in Canterbury to be the key drivers of construction growth over the next couple of years," she said.

Improved business confidence should also support stronger non-residential building demand, Leung said. She said recent inflation indicators suggested the capacity pressures brought on by the ramp-up in construction activity had been contained to the building sector so far.

"The extent to which continued construction growth flows through to a lift in underlying inflation pressures will be a key development to watch over the coming years."

Housing Minister Nick Smith released the following statement on the latest figures:

Housing Minister Dr Nick Smith today welcomed the release of the latest building consent figures from Statistics New Zealand, saying the record seven-year high for March 2014 shows the Government’s policies are continuing to deliver results.

“There were 1999 consents issued in March 2014 – the highest for the month of March since 2007, and an increase of 36 per cent from March 2013. Today’s figures also show the highest number of consents issued in the first quarter of any year since 2007 and an increase of 25 per cent on the first quarter of 2013. They reflect a steady trend of growth which has seen the number of consents continuously rising since March 2011,” Dr Smith says.

“I am especially encouraged to see Christchurch and Auckland leading the country in number of consents issued. Christchurch recorded its highest ever number of building consents this quarter and an increase of 114 per cent on the same quarter last year. This news comes on the back of the Housing Accord I signed earlier this month with Mayor Lianne Dalziel and it makes me confident that we are on the right track to restore the city’s housing stock to pre-earthquake levels and ease the pressure on its rental and temporary accommodation markets.

“We also have a Housing Accord in place in Auckland, where we have recognised housing supply is under the most pressure. Last month Mayor Len Brown and I released the first monitoring report, which showed a significant increase in new sections created and dwellings consented. The figures from Statistics New Zealand are further proof. There were 18 per cent more building consents issued this quarter in Auckland than in the same quarter in 2013.

“I expect this momentum to continue in the months to come as progress under these Accords continues. There are at least 450 new houses proposed in Christchurch with Government involvement, while the third batch of Special Housing Areas for Auckland will be determined and announced halfway through this year.

“The Government has a wide programme of work underway to improve housing supply and affordability in New Zealand. We are freeing up land supply, reducing building material costs, reining in development contributions, cutting compliance costs, investing in skills and productivity in the construction sector, and supporting first home buyers through our Welcome Home Loan and KiwiSaver First Home Deposit Subsidy schemes.

“We know there is no magic bullet to solve the housing challenge but today’s figures confirm that with these policies, we are making good progress.”