by Jenny Ruth
Housing consents rose again in April, with Statistics New Zealand saying the trend in the number has risen 30% since November 2000.
Nevertheless, the trend level is still below the July 1999 peak, the government statistician says.
There were 2,206 new dwelling units valued at $338.8 million authorised in April, up from 1,986 worth $333.7 million in March and 1,585 worth $270.6 million approved in April last year. That’s a 39.2% year-on-year increase.
In seasonally adjusted terms, April consents rose 9.9% following a 4.7% decline in March. A key factor in the April increase was the 439 apartment units valued at $30.5 million approved, up from 223 worth $30.8 million approved in March and the 266 units worth $17.8 million approved in April last year.
Deutsche Bank senior economist Darren Gibbs notes consents for single dwellings have been much smoother and experienced a more gradual upward trend.
"The relative strength of the apartment market likely reflects the composition of the current migrant inflow which is weighted towards young students," Gibbs says.
Statistics New Zealand also notes that for the year ended April, the mean number of housing consents was 1,827 a month, an increase of 198 consents or 12% on the mean 1,629 approved in the previous year.
"Mainly, this change has been driven by an increase in the number of dwelling units in the Auckland region, up 127 dwelling units per month on average or 20%," the statistician says.
The figures suggest rising interest rates have yet to bite very hard. The Reserve Bank had raised its official cash (OCR) rate twice by the end of April from 4.75% to 5.25%. It raised the OCR again this month to 5.5%.
Gibbs says there’s usually a lagged relationship between existing house sales and new construction so housing consents are likely to rise a little further in coming months, although he is expecting a downward correction in apartment consents in the May figures.
He is picking the peak to occur in the September quarter, estimating house sales in April rose a seasonally adjusted 1.1%, "easily the weakest growth rate recorded over the past six months."
Natural cyclical factors, a gradual easing in net immigrants and interest rises, both those which have occurred and those forecast, will contribute to the peak being reached, he says.
Deutsche Bank is forecasting the OCR with rise a further 25 basis points in July and 25 points more in August which will take it to 6%.
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