Slump in Building Activity - Stats NZ
Building Consents Issued: February 2000
The seasonally adjusted value of consents issued for all buildings fell 16.8 per cent in February 2000. The actual value of consents issued was $461.1 million, the second lowest total recorded in the last year. Most monthly totals throughout 1999 were above $500 million although two months recorded consents valued at over $600 million. Low totals recorded for both residential and non-residential building consents issued are the cause of the downturn.
Towards the end of 1999, a decline in residential totals was masked by several high monthly totals recorded for non-residential buildings. However, a lower value for non-residential buildings reported in February has exposed the decline in residential buildings, revealing an overall fall in construction activity as a whole.
The number of new dwelling units authorised in February was 1,620. This is the lowest February total since 1993 and the third consecutive month where the total number of dwellings authorised has fallen below 2,000, following nine months where totals were consistently above 2,000. Last year's apartment building boom appears to be over with only 141 new apartment units authorised in February, the lowest monthly total for apartments since October 1998. In the last five months 1,242 new apartment units were authorised compared with 1,998 in the previous five months.
A number of factors may be contributing to the downturn in residential building activity. Rising interest rates, uncertainty about the impact of proposed changes to state housing rentals and a possible oversupply of houses resulting from last year's residential building boom may all be having a negative impact on the current level of residential building consent applications. A downturn in the real estate sales market may also be influencing the level of new houses built, with sales of houses in February 2000 down 9.2 per cent compared with the previous February according to the Real Estate Institute of New Zealand.
The underlying trend for the value of non-residential buildings is declining following growth throughout most of 1999, however, it is too early to tell whether this is a true turning point. The total of $55 million recorded for factories and industrial buildings is the highest for that building type since January 1996. The 10 biggest consents for factories and industrial buildings make up over $40 million of the total. Two consents for government funded projects make up just over half this amount with the rest being funded by private enterprises.
Ian Ewing Deputy Government Statistician END