Consents issued in August hit their highest level for that month since 1975.
The for 2,704 new housing units worth $464.4 million approved were up 9.6% on July in seasonally adjusted terms and were up 34% on August last year.
And the market’s strength in August had nothing to do with new apartments. The 2,390 consents, excluding apartments, issued was the highest monthly total recorded since the current data series began in January 1990.
But apartment construction is still strong with 314 new units approved in August, up from 273 in July and 232 in August last year.
Darren Gibbs, senior economist at Deutsche Bank, says sales activity in existing homes tends to lead housing consents by five months which suggests consents will stay firm in the near term. "Capacity constraints in the building industry may mean that any further increase in demand is reflected in increasing backlogs of work, rather than a further significant near-term increase in consents."
Even when housing sales do begin to slow, building activity is likely to remain strong for some months.
Still, Gibbs notes that inflation appears to be slower for new homes than among sales of existing homes which was running at 16.2% in August. The average value of non-apartment consents on a three-month moving average basis was only 4.3% higher than a year earlier.
"As far as monetary policy is concerned, this release merely confirms what we already know – the housing market is very buoyant," Gibbs says. But eventually, the big increase in the supply of houses should contribute to moderating current high demand.
The figures show that 13 of 16 regions registered higher consents in August than in the previous August and that the Auckland region continues to be the main contributor with its 1,031 consents accounting for 38% of the total.
In the year ended August, the 29,556 consents issued with up 25% on the previous year and was the largest August annual total recorded since 1976. There were 5,638 new apartments approved in the year, up 63% on the previous year.
