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Building approvals fall to 22-year low

New Zealand home-building approvals fell to a 22-year low last month, reflecting an economy that may not climb out of recession until the final quarter of the year.

Tuesday, September 30th 2008, 12:44PM

by The Landlord

The number of permits issued fell 7.9% to 1,284, seasonally adjusted, in August, extending a 1.7% slide in July, Statistics New Zealand (SNZ) said. The number of approvals tumbled 43.3% from a year earlier.

Excluding apartments, consents fell 8.9%.

Non-residential consents were valued at $362 million, down $36 million from August last year.

For the year ended August, the value of consents issued for residential buildings was $6.83 billion, 13% lower than the year ended August last year.

ASB economist Jane Turner believes “slowing net migration and high interest rates, combined with falling house prices have reduced incentives to build”.

The value of non-residential construction was up 6% to $4.38 billion for the year.

The trend for the total value of residential building consents was down 33% in the same period.

“The weaker result implies we can expect even more decline in residential construction, which has already contracted 15% since quarter three of 2007,” Turner said.

The value of consents issued for all buildings in August was $819 million, down 30% from a year earlier, while for the year the total value was down 6.6% to $11.2 billion.

New Zealand’s economy may have contracted 0.5% in the third quarter, according to a Bank of New Zealand, extending the first recession since 1998. Some economists are anticipating the central bank will cut the official cash rate 50 basis points next month to 7% and make at least two further reductions to help revive the economy.

“As the economy reflects the reality of the housing bust and contagion from global financial markets, expectations of a quick recovery are likely to be dashed and add to the urgency to ease interest rates,” said Shamubeel Eaqub, economist at Goldman Sachs JBWere.

Eaqub expects a 32% contraction in residential building in the year ending June 30, 2009. Job losses in the construction industry may reach 60,000, he has forecast.


 

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.99 ▼6.49 ▼6.29
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 20 June 2024 10:39am

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