February housing consents at 30-year high

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The latest housing consents figures for February were at their highest level for this month in 30 years, belying expectations the housing market is cooling.

Thursday, April 1st 2004, 4:22PM

The figures show 2,529 consents for new dwellings worth $478.3 million were issued in February, a 0.7% increase from January in seasonally adjusted terms. This was on top of the 12.1% (revised upwards from 11.1%) increase in January.

The February consents were 40.7% higher than the 1,797 consents worth $330.4 million issued in February last year.

Consents for the year ended February were up 11% to 30,923, the highest number recorded for a year ended February since 1976.

Deutsche Bank senior economist Darren Gibbs says the February figures are much stronger than expected. "A continued high level of apartment consents was the main surprise. Excluding apartments, we estimate that ‘single-unit’ dwellings recorded a 2.5% month-on-month decline."

There were 559 new apartments worth $90 million approved in February, up from 471 worth $48.7 million in January and 54 worth $5 million in February last year.

Excluding apartments, there were 1,970 consents in February, up from the 1,914 in January but down on the 2,116 approved in December last year.

Of the 16 regions Statistics New Zealand measures, consents were up in 11 compared with February last year and Auckland accounted for 43% of the total.

Kate Skinner, an economist at ASB Bank says the consents figures, on top of the latest National Bank survey which shows a net 42.2% of businesses expect general business conditions to deteriorate over the next 12 months, highlight the dilemma the Reserve Bank faces.

She notes that February is typically one of the quietest months for building consents.

"The building industry, a driver of growth and inflation at present, is not showing much evidence of slowing."

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