The number of building approvals in New Zealand fell 2.9% in March after rising 6.4% in February.
The latest Statistics New Zealand figure show in March 2007, the trend for the number of new housing units authorised continued the decline which began in September 2006.
When apartment units are removed from the series, the trend also shows a decrease.
In March 2007, consents were issued for 2,269 new housing units, 30 fewer than in March 2006. Excluding apartments, the number of new housing units authorised was the same in March 2007 and 2006.
In March 2007, 190 new apartment units were authorised, compared with 229 in February and 219 in January.
For non-residential buildings, the value of consents issued in March 2007 was $413 million, 12% higher than in March 2006. Office and administration buildings had the largest increase, while education buildings had the largest decrease.
According to JP Morgan, annual growth in building approvals made a spurious jump to 3% on a year on year basis after falling -8.5% in the 12 months to February.
JP Morgan’s economist Jarrod Kerr said trend growth in building approvals in NZ has been in a downward spiral for over seven months, and the last two Reserve Bank of
“Since the RBNZ tightened policy in March, and went on the war path with local banks over mortgage rate margins, mortgage rates across the curve have gone up an average 70-100bps.
“The substantial increase in interest rates is likely to show up in this month’s housing activity reports from REINZ and QVNZ, and enable Governor Bollard to breath a sign of relief,” he added.
Kerr said it should be noted though that the seasonally adjusted series for the number of new dwelling units should be treated with caution because the seasonality is currently not well identified.
According to Statistics NZ, the volatility in this series is largely caused by fluctuations in the number of new apartment units. The Building Act 2004 has also had an impact, due to changes in administrative processes.
Australian Property Journal
