New dwelling consents rose 14.6% in the January year but there are fears the growth in activity may have stalled

Building consents were issued for 1703 new homes in January, up 3.6% compared with January last year.

While the growth in consents in January was far from spectacular, the figures look more promising on an annual basis, with 24,776 new dwelling consents issued in the 12 months to January, which was up 14.6% on the previous 12 month period.

Of the new consents issued in the year to January, 3481 (14%) were for apartments, with the remaining 21,295 (86%) being for stand alone homes, town houses, or smaller blocks of home units or terrace houses.

Around the regions, the largest number of new dwelling consents issued in January were in Auckland (482) followed by Canterbury (467), Waikato (180), Bay of Plenty (139), Wellington (117) and Otago (91).

January's figures will give Aucklanders little to cheer about because although they were up 11% on January last year, they are still well below the numbers needed to address the region's chronic housing shortage, with the Reserve Bank estimating that 10,000 houses a year need to be built in the region just to keep up with demand,  while only 7681 consents were issued in the year to January.

That suggests the number of new homes being built in the region needs to increase by 30% before supply starts to catch up with demand, but even that much of an increase would address the pent up demand for homes that already exist due to the region's high migration-fuelled population growth and low levels of housing construction

In Canterbury the 467 consents issued in January was down 10.2% on the 520 issued in January last year, adding to recent housing sales evidence which suggests supply and demand are starting to come back into equilibrium in the region, as it continues to recover from the 2010/2011 earthquakes.

Commenting on the latest figures Westpac senior economist Michael Gordon said on a seasonally adjusted basis the number of dwelling consents issued in January was down 3.8%.

"January is typically the low point of the year for the housing market, so as with the unexpectedly sharp fall in house sales that we saw last month, we're prepared to wait for another month or two of data," Gordon said.

"But it's hard to avoid the impression that the housing construction upturn has stalled in the last six months, just as population growth and  recent policy measures have underscored the need to build more."

The total value of consents issued for all types of residential building work in January, including consents for additions and structural alterations to existing homes, was $645 million, virtually unchanged from the January 2014 figure of $648 million.

The figures also show that the value of building consents issued for commercial buildings continues to grow at a much faster pace than residential consents.

Consents were issued for $351 million of non-residential building work in January (which includes shops, factories, warehouses and offices as well as social service buildings such as schools and hospitals) which was up 21.5% compared to January 2014, while for the 12 months to January, consents for $5.161 billion on non-residential building work were issued, up 21.1% on the year to January 2014.