New Zealand property building approvals fall

Country: New Zealand

3 August 2009

The volume of New Zealand home building permits issued in June fell for the first time in three months, suggesting that lower mortgage rates are yet to restore demand for property in New Zealand.

Approvals fell by a seasonally adjusted 9.5% month-on-month in June, according to data released by Statistics New Zealand.

The agency said that the number of permits issued in Q2 rose 16% from Q1 and the trend in approvals is rising by around 2% a month.

The interest rate in New Zealand currently stands at a record-low 2.5% as the country’s tackles its worst recession for over 30 years.

Economists expect building permits to continue growing throughout the course of 2009 leading to greater New Zealand property sales and price rises and steer the economy out of recession.

Jane Turner, economist at ASB Bank Ltd in Auckland, said: “We expect core consent issuance to start to improve with the lift in housing demand, as indicated by the rise in house sales.”

A report from the Real Estate Institute a few weeks ago showed that New Zealand home sales rose 40% in June from a year earlier.

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