Housing supply response weakens again in April

The trend for dwelling consents in Auckland fell again in April, with construction cost and capital constraints cited. Auckland needs to be building 1,200 a month to keep up with population growth, but just 726 were consented in April.

Auckland's housing supply response isn't keeping up with demand, according to the latest dwelling consent figures published by Statistics New Zealand.

There were 10,266 dwellings consented in Auckland in the year to April, as reported by Statistics New Zealand. This was up 9.3 percent from the previous year and the most for an April year since 2005. However, this remains well below the 14,000 a year estimated as needed to be built every year in Auckland to keep up with population growth.

Dwellings consented have also not turned into dwellings built in the last year, with Auckland Council recording just 7,200 new homes completed in the calendar 2016 year.

The trend measure for Auckland dwelling consents in April fell again to 767 and has been falling since it hit a peak of 886 in September last year.

"The demand backdrop is clear, with a housing shortage (at least in Auckland) and strong population growth requiring ongoing lifts in housing supply," ANZ economist Philip Borkin said.

"However, that supply response is being challenged by capacity and capital constraints in the construction industry," he said.

There were 2,106 dwellings consented nationwide in the month of April, which was down 10.8 percent on the number consented in April 2016.

Statistics New Zealand cited the timing of Easter this year, given councils don't issue consents on public holidays.

Other economists also cited the close proximity of ANZAC Day and Easter as a factor in the slowdown, that could be reversed in May and future months.

"At face value, a fall in building consents is disappointing as we are looking for a meaningful recovery following the trend decline seen in the second half of 2016," ASB economist Jane Turner said.

"We must patiently wait for May’s data to confirm if building consent demand is still recovering from its H2 2016 lull," she said.