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Home building consents fall in June

house_developmentThe number of new homes consented in June fell more than 4 per cent on the previous month, according to Statistics NZ figures.

The fall in June followed a flat result in May, though figures have been weaker mainly because of the ups and downs in the apartments sector, economists said. But consents for individual homes also dipped slightly in June. 

Last month, 2042 new dwellings were consented nationally, up just 2.0 per cent on June last year. That included about 1500 homes, with the balance in apartments, flats and retirement units.

However, in seasonally adjusted terms, the total was down 4.1 per cent from May 2015.

Year on year, total house building consents were down 4.5 per cent.

Many more homes are being built in Auckland than in June last year, but there has been a big drop in Canterbury.

The number of consents in Wellington in June was also down on the same month last year, and the numbers are seen as "choppy" in the capital, economists said. 

ASB Bank economists said the rate of growth in Auckland housing consents was still rising, but was not enough to balance the growing population in the city, which faces a shortage of homes.

The Canterbury rebuild may have peaked, but there was still a lot of work outstanding, and so Canterbury house building should stay at relatively high levels in the next few years, ASB said.

The Reserve Bank was expected to keep cutting official interest rates which would also help stimulate demand for housing nationally, ASB said.

Deutsche Bank said the fall in total housing consents in June was disappointing. The latest figures showed further evidence that house building in Canterbury was "past the peak".

Home building was expected to keep growing in Auckland, but that was likely to be offset to some extent by weaker building plans in Canterbury.

Deutsche Bank said it was concerned the economy would not achieve the growth forecasts expected by the Reserve Bank, unless official interest rates were cut further. Another two rate cuts to 2.5 per cent were expected by Deutsche Bank.

In June, home consents in Auckland were up 105, to 704 for the month, a gain of 18 per cent on the same month last year.

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