News: UPDATE 1-NZ building approvals rebound sharply in Nov, quell development worries

• NZ November dwelling consents rise 10.4 pct
• Reverses sharp drop in previous month
• Points to much needed pick-up in development - economists

(Recasts, adds economist comment, market reaction)

WELLINGTON, Jan 12 (Reuters) - New Zealand residential building approvals bounced in November after a sharp drop the previous month, quelling concerns housing development had run out of steam as the government tries to address a nationwide shortage.

The number of dwellings approved jumped a seasonally adjusted 10.8 percent in November, erasing a 10.4 percent drop the previous month, data from Statistics New Zealand showed on Friday.

While the series is volatile, the strong result went some way towards assuaging fears that residential development was faltering in the midst of a nationwide housing shortage.

The dearth of housing stock has been blamed for the sharp jump in property values in the past few years, and has become a heated political issue.

House prices soared more than 50 percent in a decade, and almost doubled in Auckland, which have priced out many first-home buyers.

Despite strong demand, the construction sector has struggled to keep up as it became mired in a skill shortage and banks tightened their grip on development lending.

Outcry over the housing shortfall in part fuelled the success of the new Labour-led government, which took the helm in October after campaigning to build tens of thousands of homes in a program dubbed 'KiwiBuild'.

The New Zealand dollar rose to a fresh three-month high of $0.7272 after the data. It last stood at $0.7264.

November's leap was largely driven by consents for apartments in Auckland, which hit a 15-year high according to the statistics agency.

"Importantly, if Auckland can sustain the pace...it would finally start eating into its significant shortfall of housing - albeit, very gradually," said Satish Ranchod, senior economist at Westpac Bank.

The latest figures showed building consents were 8.6 percent higher than the same month a year ago.

Excluding apartments, flats, and retirement village units, the number of consents for new houses was down 1.3 percent.

"Looking ahead over the next few months, additional uncertainty, as developers await further details of the proposed KiwiBuild plan, may weigh on construction demand," said Jane Turner, senior economist at ASB Bank.

"But this should be a short-lived dip."