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Interest Rates and Migration Deflate New Housing

Building Consents Issued: March 2000

Interest Rates and Migration Deflate New Housing Trend

The underlying trend for the number of new dwellings authorised in March 2000 decreased for the eighth consecutive month. The decrease in the number of new house approvals has nearly reversed the earlier gains of 11 months of growth. The actual number of new dwellings authorised was 2,062.

Low interest rates were one of the causes of last year's building boom, which may have resulted in some over-supply of houses. This, combined with rising interest rates, has had a negative impact on both the number of new dwelling applications and the real estate market, which has recorded decreasing sales for several months. In addition, migration statistics show a net outflow of 19,186 people in the two years to 31 March 2000, compared to eight consecutive years of net inflows before this.

The trend for the value of non-residential building projects is also declining for the fourth month. There were no large projects approved in March, with all consents issued for non-residential buildings being under $6 million each. The total for non-residential buildings was $159.8 million. Offices and administration buildings contributed $34.2 million, the largest proportion of the total.

The total value of consents issued for all buildings in March was $542.9 million.

Ian Ewing Deputy Government Statistician END

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