NZ value of residential building put in place rises 4.3% in third quarter

Thursday 15th December 2016

The value of residential building work put in place rose at a slower pace in the third quarter of 2016, reflecting a more modest pace in Auckland and Canterbury.

The seasonally adjusted value of residential building work rose 4.3 percent in the three months ended Sept. 30 compared with the second quarter, when the increase was 7.4 percent, Statistics New Zealand said. Building work volumes grew a seasonally adjusted 2.4 percent in the latest three-month period, down from 5.7 percent in the second quarter.

Analysts are looking for signs that measures to cool the Auckland housing market, where demand is spilling over into other regions, are working. Realtor Barfoot & Thompson this month said a decline in the average house price in the city last month may have signalled a "turning" point after seven years of increases, while the Reserve Bank said in its six-monthly financial stability report that house price inflation in Auckland had softened in recent months.

Total building volumes rose 1.4 percent, seasonally adjusted, in the third quarter, for an annual gain of 16 percent, while the value rose to 3.2 percent for an annual 22 percent increase. The value of building work in Auckland fell 0.2 percent and in Christchurch declined 1.5 percent.

"Building work put in place was slightly weaker than expected. However, we retain our Q3 GDP forecast of 0.8 percent," said Jane Turner, economist at ASB Bank. "Construction activity continues to grow robustly across NZ. With demand at extremely high levels, construction cost inflation continues to accelerate."

In actual terms, the value of residential building work rose 25 percent from the same quarter of 2015 to $3.3 billion, with Auckland work rising 32 percent to $1.2 billion and Canterbury gaining 1 percent to $646 million.

The actual value of non-residential building work rose 18 percent from a year earlier to $1.9 billion, led by a 33 percent gain to $612 million in Auckland and an 8.4 percent increase to $553 million in Canterbury.

BusinessDesk.co.nz

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