New Zealand residential building permits rose in January as a pick-up in consents for new apartments and townhouses made up for a decline in applications to build houses.

Seasonally adjusted dwelling consents rose 0.8 per cent to 2234 in January, snapping two months of declines, Statistics New Zealand said.

Permits for new houses fell 5 per cent to 1603, its fourth decline in five months.

A jump in new permits for apartments and townhouses drove the increase, although those projects are relatively volatile and can be skewed by major developments.

Across all dwellings, consents rose 3.4 per cent 1752 in January from the same month a year earlier. .

Auckland accounted for the most consents, with 512 valued at $184 million approved in January, compared to 506 permits worth $240 million a year earlier.

In the year through January, Auckland consented 10,032 new residential dwellings, still below the 13,000 estimated to be needed to keep pace with an expanding population.

“The slowdown in Auckland housing consent growth is concerning given existing supply shortages,” ASB Bank economist Jane Turner said.

“Strong population growth over the past few years has lifted housing demand in many parts of the country, and we expect momentum to continue at least for another year.”

New Zealand’s property market and Auckland’s, in particular, have posed problems for policymakers concerned about the rapid escalation in house prices and the accompanying increase in household debt at a time when a housing shortage coincided with record high inbound net migration.

That’s created a massive pipeline of building work to try to make up the shortfall, although the construction sector is facing capacity constraints, especially in Auckland where the need is most acute.

Statistics NZ figures show annual residential permits were up 11 per cent to 30,123 in January, of which new houses rose 11 per cent to 21,277.