In perhaps the first hard evidence that the housing market is slowing, housing consents fell 15.4% in February, although most of that fall was due to a sharp decline in apartment approvals.
Statistics New Zealand says the actual number of consents in February was 1,797 worth $330.4 million, down from 1,995 worth $340.3 million in January. There were 1,745 consents worth $293.3 million in February last year.
Still, the government statistician notes that the average number of approvals in the three months ended February was about 2,100 compared with only 1,580 in the same three months a year earlier.
Deutsche Bank chief economist Ulf Schoefisch says the figures are consistent with his view that the housing market peaked late last year.
"Today’s data add to evidence from the retail sector and the market for existing homes that domestic demand is slowing," Schoefisch says. Monthly sales of existing homes fell 6.4% between October and February, he says.
Deutsche Bank is expecting the Reserve Bank to cut its Official Cash Rate (OCR) from 5.75% to 5.5% by June and that at its next OCR review on April 24 it will "at least acknowledge that there is a growing body of evidence that the domestic economic slowdown is well underway," Schoefisch says.
Still, Real Estate Institute figures show there were 9,624 homes sold in February, up from 8,159 in January and 8,733 in February last year. That was still below November’s record 9,932 homes sold.
The latest consent figures leave no doubt that New Zealand has been enjoying a housing boom. In the year ended February, there were 27, 769 approvals, up 32% from the previous year and the largest February year total since 1977.
