The seasonally adjusted number of new housing units authorised, excluding apartments, has fallen for the fourth consecutive months to the lowest level since July 2009, Statistics New Zealand has said.
Westpac says the figures were below its forecast, though consistent with the "general cooling in the housing market."
"After showing promising signs of recovery through 2009, building consents have declined over this year as higher interest rates, slower net migration and concerns over tax changes cooled the housing market."
"The continued slide in house sales, now back to the lows of the 2008 recession, on its own, suggests further downside for building consents in coming months."
Over October 1,099 new housing units were authorised, which excluding apartments is a 1.1% fall on the month earlier.
Looking at the longer term trend, the number of new housing units authorised, excluding apartments, has fallen steadily in recent months and has declined 20% since March 2010. When the volatile apartment category is included the trend is similar, declining 18% since April 2010.
Apartments contributed 2.1% to the number of new dwellings authorised in October, compared to a monthly average of 5.1% over the past year.
During last month consents were issued for 1,123 new housing units, including apartments, 1,099 new housing units excluding apartments and 24 new apartments.
The value of consents issued for residential buildings was $145 million in October, down 14% on the month earlier.
JP Morgan's Ben Jarman expressed surprise rebuilding activity in the wake of the Canterbury earthquake had not created a short-term surge in the numbers.
"Only a small number of low value consents in October were earthquake-related, meaning the boost to permit activity has been delayed, if not spread out over several months, against the broader weakness in the domestic economy," he said.
He said the 2% month-on-month decline gave "a sense of the very weak pulse in building activity in New Zealand at present."
"The necessity of the earthquake rebuilding aside, households and developers have little incentive to invest, with the economic recovery remaining very patchy, and the housing market lacking momentum."