NZ residential building activity rises 2.9% in third quarter

Residential building activity rose in the third quarter, offsetting a decline in non-residential building and pushing overall activity on a trend basis to the highest level in 10 years.

Residential activity rose 2.9%, seasonally adjusted, in the three months ended September 30, following a 0.7% decline in the second quarter, Statistics New Zealand said. Non-residential activity fell 2.6%, for an overall gain of 0.5%. The trend for all building work rose 1% and exceeded the previous series high reached in June 2005 by 0.8%, it said. Economists had expected a 1.8% gain in overall activity.

Building activity in the third quarter grew in all regions except Wellington, where it fell 8.2%. Waikato charted the strongest lift, at 11%, followed by Auckland, up 4%. Activity in Canterbury grew 0.1%. Growth in Waikato activity may stoke speculation of a spillover effect from Auckland's overheated property market, which has driven some buyers to look further afield for an affordable home. The central bank introduced Auckland-specific lending restrictions last month, while the government's more stringent enforcement of taxing speculators' capital gains began in October.

"Residential activity rebounded after a quiet quarter in June," said David Norman, industry economist at Westpac Banking Corp. "As expected, much of the growth was driven by continued rises in Auckland residential activity, offset by flat activity in Canterbury as the residential component of the rebuild slows."

The actual value of all building work put in place was $4.2 billion, made up of $2.6 billion in residential and $1.6 billion of non-residential buildings. Of the total, Auckland accounted for $1.4 billion and Canterbury for $1.1 billion, meaning the two regions accounted for 60% of the national total.

(BusinessDesk)

Jonathan Underhill
Thu, 03 Dec 2015

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NZ residential building activity rises 2.9% in third quarter