Building and Construction

Continued upturn in building consents in July

Thursday September 05, 2013 Fiona Stokes

As mentioned in our latest edition of BEV, the three months to June has seen activity in the building and construction sector step up to another level. 

The latest figures from the housing and non-residential sectors for July show this momentum continuing.

As the chart indicates, consents are now above a year-earlier in 13 of the 16 regions, with double-digit growth in nine of those regions. 

The expansion in Bay of Plenty and Auckland are particularly stark (over 40 percent), as shown below in the figure for the Auckland Region.


This expansion suggests a rapid adjustment in the house supply-demand imbalance occurring.  In the three months to July, consents in the Canterbury housing market rose to almost 35 percent above the year earlier.



The New Zealand total of more than 19,150 new house consents for the year to July is now at a four-year high. 

The last time the number of new house consents was over the 19,000 mark was in November 2008.  While still well below the 22-25,000 range that many consider to be a long-term ‘average’, the rate of increase suggests this range will be reached later this year. 

Consequently, there are concerns as to building industry capacity – labour and skills, businesses, regulatory functions, and materials – may lead to rising cost pressures in this industry.


In the non-residential building sector the pace of the recovery has picked up, but is noticeably less pronounced than in housing. 

This is likely to result from a combination of capacity constraints in the broader building industry, as well as little growth in credit available to the business sector and profitability concerns curtailing investment decisions.



Within this sector, the growth is concentrated in the storage buildings sub-sector, with areas consented at more than double year-earlier levels. 

Much of this is associated with the Christchurch re-build.