Statistics New Zealand reports the 3,412 homes approved in October was the largest number in a month since March 1976, but 45% of the approvals were for apartments.
The October consents were 35.2% higher than in September and were 72.9% higher than in October last year.
The government statistician says the trend in consents has been increasing steadily since December 2000.
Darren Gibbs, senior economist at Deutsche Bank, notes that excluding apartments, consents actually fell in October from September and that was the third consecutive monthly decline. Compared with October last year, consents excluding apartments were just 14.3% higher.
"Such a high level of issuance is unlikely to be sustained – indeed, our spot forecast for next month’s issuance is a 30% decline month-on-month," Gibbs says.
"We think that divergence between consents issued for apartments and for single unit dwellings likely reflects the composition of current migrant flows," he says. Large numbers of foreign students coming to New Zealand has pushed up demand for small centrally located accommodation. Gibbs notes that 85% of apartment consents were in Auckland where migrant flows are strongest.
The Auckland housing market overall continues to be buoyant, accounting for 57% of all consens in October. Auckland consents were more than double the number in October last year.
In the year ended October, consents rose 30.2% to 25,889. Of those, 5,048 were for apartments, up from 2,434 in the previous year.
