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Building consents figure reflects softening market

27 February 2008

Low building consents figure reflects softening market

New building consent figures released today continue the trend of a softening residential market while the commercial building sector remains steady, the CEO of Registered Master Builders Federation, Pieter Burghout, said.

The figures released by Statistics New Zealand were for January 2008, a traditionally quiet month in the building and construction industry.

While the figures were consistent with recent months, they revealed some troubled times ahead for the regions, with some experiencing significant drops. For example, consents on Auckland's North Shore for January 2008 were down to 36 from 69 compared to January 2007 - a decrease by nearly half. Likewise consents were down in Waikato from 44 to 20 and in Napier from 62 to 22.

"Some regional centres will be feeling the pinch in terms of building volumes," Mr Burghout said.

"As much as December and January are usually much slower months, the sector is reporting that January 2008 was slower than is typically expected. This could be due to the better weather and people taking longer holidays. We therefore await the February stats with interest to see what the trends are looking like."

A huge milestone for the industry is the unprecedented $12 billion annualised turnover for the year to January 2008.

The expectation is for the residential sector to pick up again around the last quarter of 2008 and the commercial sector to remain relatively strong overall.

Registered Master Builders Federation continues to encourage the Government to get cracking on solving the housing affordability issues of land availability, regulatory fees and compliance costs.

"We need to get back to building more houses. If the new house construction trend continues to decline, housing affordability levels will get worse, so more needs to be done to help get the construction industry build more houses," says Mr Burghout

ENDS

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