Building consents edge up slightly after slump

Consents for new homes, excluding apartment approvals, rose 1.7% to 1,316 in June from the same month a year ago after a 10% slump a month earlier, according to Statistics New Zealand data. Including apartments, the number of new homes authorised rose 3.5% to 1,373.  

"Dwelling consents tends to lead construction activity by around three months, and recent trends in consent issuance points to a relatively subdued recovery in residential construction activity," said Jane Turner, ASB economist.

The recent sharp slowdown in net migration and resulting slower population growth will weigh on the outlook for new construction demand." 

The property market fell into the doldrums this year after a surge in net migration stoked demand for new houses last year as tight credit conditions starved new development. The Reserve Bank painted a grimmer picture of the economy in its official cash rate review yesterday, noting a slowdown in migration as a brake on consumer spending.