Palmerston North has had a decline in the number of building consents issued, while the Manawatu District has enjoyed a boost.
The city experienced a drop of 9 per cent in the volume of building consents for the three months to the end of May. The Manawatu District's consents jumped by 60 per cent, according to Statistics New Zealand.
However, the value of building consents for the same period had Palmerston North up 6 per cent, with the Manawatu District climbing by 81 per cent.
Palmerston North City Council economic policy adviser Peter Crawford said there had been some variability between the city and the district for the past year.
"We had some growth from the beginning of 2013, while Manawatu was slowing down but now that's changed and Manawatu is picking up. Some of that will come around land supply and pricing of land.
"A lot of houses are built by a developer and then sold but we don't have good data on who is actually building the house."
Registered Master Builders' Manawatu immediate past president Steve Brown noticed an immediate shift once loan-to-value-ratios (LVRs) were introduced.
The LVR is a measure of how much a bank lends against residential property, compared with the value of that property.
The Reserve Bank tightened up the rules so that banks were less likely to engage in high-risk lending and this seems to have resulted in fewer people buying homes.
"Once you stop the new home buyers then people don't sell and trade on as quickly," Brown said.
Architectural consultant Colin Duckett said he noticed less interest in making applications for building consents but he expected to see a change in the next quarter.
"Today it's starting to pick up again. Those consents will be positive in probably three or four months' time."
The trend for the number of new dwellings consented across New Zealand is at its highest level since September 2007, but has flattened in recent months.
"The trend for new dwellings has been increasing for three years, but is still 28 per cent below the series peak in 2004," Statistics NZ business indicators manager Neil Kelly said.
Master builders' association chief executive Warwick Quinn said the overall trend had stabilised after two years of strong growth.
Quinn expects some 23,000 to 24,000 residential building consents to be issued in 2014, up from 21,300 in 2013 and 16,929 in 2012. The two main centres of Auckland and Canterbury still make up nearly 60 per cent of all activity and this is expected to continue.
"Auckland's growth over the last 12 months is 30 per cent higher than the previous 12-month period while Canterbury's is 40 per cent higher, mostly on the back of Christchurch City doubling the number of consents issued in the last year with that part of the Canterbury region's rebuild get under way," Quinn said.
The lack of land was the key driver and needed to be corrected if overall property prices were to be contained, Quinn said.
A total of $1.2 billion of building work was consented in May, with $842 million of residential work and $370m of non-residential work.
- Manawatu Standard
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