House consents tipped to plummet

PHOTO: 123RF Auckland’s consents remained more resilient, reflecting the shortage of housing.

Building consents have suffered their worst month in nearly 12 years, after lockdown put the brakes on the thriving house building sector.

Residential consents for houses and townhouses plunged abruptly by 21 per cent in March, the biggest monthly fall since October 2008, during the global financial crisis.

Prior to that, the residential market was steaming along, up 5.7 per cent in February as the Auckland market caught a fresh wind.

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Builders are now largely back at work under strict social distancing measures but the industry is worried about the months to come and the prospect of some consents being shelved.

”Once the dip over, a sharp rebound is inevitable, but a weakening trend is also expected to prevail for some time on the other side of this,” ANZ senior economist Liz Kendall said.

Consented non-residential work also fell, down 10 per cent month on month.

Weak housing demand and investment would weigh on the sector, and companies with profitability and productivity challenges that were masked by the good times could become exposed, she said.