Residential building consents in New Zealand have hit six year highs as activity in red hot markets of Christchurch and Auckland continues to drive construction sector growth.
On a trend adjusted basis, which strips out seasonal factors and other abnormal or ‘one-off’ effects, the number of new dwelling units approved for construction throughout the country edged up 0.1 percent during May to come in at 2,053 – the highest level on record since December 2007.
Furthermore, at 22,849 (not trend or seasonally adjusted), housing and apartment approval numbers in the first five months of this year are up by almost a quarter compared with the same period last year and by more than 50 percent in the first five months of 2012.
And whilst Christchurch and Auckland continue to be the primary drivers of activity, Wellington also appears to be picking up, with approvals in the nation’s capital up 26.1 percent during the March quarter for new housing and 9.1 percent for renovations of existing homes according to a recent analysis by the Ministry of Business, Innovation and Employment.
The latest data comes as the government ramps up efforts to address housing supply and affordability issues.
On Monday, Cabinet approved a third tranche of ‘Special Housing Areas’ earmarked for land releases and fast-tracked urban development in Auckland.
Last week, meanwhile, the government signed an accord with the Wellington Mayor to free up dwelling supply in the capital city,
Housing Minister Dr Nick Smith welcomed the latest data.
“The nationwide figure of 2125 (unadjusted) brings the year to May total to 22,859,” Smith said, adding that the government was focused on addressing a number of areas including land supply, building material costs, development contributions, compliance reduction, skills and productivity and first home owner support.
“This is the highest rate of consents issued in seven years and illustrates the boom that is underway in the construction industry.”
Outside of housing, non-residential building activity is also picking up, with activity particularly strong in the office building sector (see chart).
In the first five months of this year, the dollar value of new building consents in the non-residential sector was up by 9.4 percent compared with last year and 16.7 percent compared with 2012.