Sun still shining on construction sector

Consent growth rate might be starting to slow down, but the industry is still booming

In August, the number of new dwellings consented, including apartments, was 2,022 (1,768 excluding apartments). Of the 254 apartments consented, 108 were retirement village units.

The trend for the number of new dwellings, including apartments, has more than doubled since the March 2011 series low but the rate of growth is slowing and is 25% below the January 2004 series peak.

Seasonally adjusted, there was no change in the number of new dwellings, including apartments, consented from July to August. Excluding apartments, the seasonally adjusted figure fell 1.6%.

In the regions

The number of consented dwellings was up in 13 of the 16 regions compared to August 2013. The largest increases were Auckland (up 153 to 656) and Canterbury (up 74 to 540), followed by Bay of Plenty and Northland – both up 21, to 139 and 71 respectively.

In Auckland, 113 more apartments were consented, while the city also accounted for 35% ($153 million) of the national total of non-residential work in August ($433 million). Christchurch City and Lower Hutt City were the two next biggest contributors, with $115 million and $21 million respectively.

The total value of earthquake-related consents in Canterbury since September 4, 2010 has hit $2.1 billion, including $76 million in August.

In the year to June in Auckland, Wellington and Greater Christchurch, the value of consents for alterations and additions increased by 12%, 10% and 8% respectively, compared to the previous 12 months. Nationally, the value of consents for alterations and additions was unchanged.

MBIE quarterly review paints positive light

In the June 2014 quarter, the average house value increased 7.6% to $479,193. Average weekly rents increased by 4.1% to $370 over the last 12 months, compared to the Consumer Price Index, which increased by 1.6%.

Between the December 2013 and March 2014 quarters, construction gross domestic product (GDP) increased by 7%. In the 12 months to March 2014, construction GDP increased 13.6% to $2.2 billion compared to the GDP for all industries, which increased 3.8% to $38.6 billion (figure 1).

Employment remains strong in the construction industry; in the year to June 2014, 107,400 people were employed in construction. Average hourly construction earnings increased 4.2% to $26 an hour, decreasing the gap between construction and all industries to $2 (figure 2).