New Zealand building consents fall back, but trend is up

As expected, New Zealand building consents fell on a seasonally-adjusted basis in August, down 4.9% from the month before. This was largely the result of a spike in consents in Auckland in July.  Multi-unit consents (mostly apartments and townhouses) in particular can be lumpy from month to month, making it difficult to read too much into monthly changes. However, the decline in the number of residential consents in August was not as pronounced as expected, meaning the trend upward is stronger than originally thought. Given the shift to multi-unit buildings in Auckland, we can expect to see more of these monthly fluctuations as large new developments are consented or not.

Nevertheless, the trend is that residential building consents are on the rise, with year-on-year growth of 8% nationally. Much of the growth is expected to be in Auckland, with Canterbury consent numbers flattening as the residential component of the rebuild begins to taper off.  

"We expect seasonally-adjusted quarterly numbers and year-on-year numbers to continue to show growth for some time. Indeed in trend terms, residential consents were up for the 6th month in a row", says Westpac Research.

Non-residential consent values were up sharply to $671 million for the month, driven by strong activity in Christchurch as the commercial part of the rebuild picks up steam.  The trend for non-residential activity in Canterbury is upward, but this was a particularly lumpy month.