New Zealand quarterly dwelling approvals near three-year high

[WELLINGTON] New Zealand building approvals neared a three-year high in the third quarter, adding to signs of optimism in the construction industry that could underpin an economic recovery. Approvals reached 10,079 in the three months to September, the most since the fourth quarter of 2022, Statistics New Zealand said on Friday (Oct 31) in Wellington. Adjusted for seasonality, approvals rose 9.9 per cent from the previous three months – the biggest jump since 2021. Construction has been slow to recover from a sharp downturn last year, even as the Reserve Bank of New Zealand (RBNZ) has aggressively cut interest rates. The rebound in consent issuance suggests that developers have more confidence that lower borrowing costs and rising property prices will fan demand for new houses. “Signs of a recovery in residential building are starting to emerge,” said Satish Ranchhod, senior economist at Westpac in Auckland. “With large reductions in interest rates working their way through the economy, we expect the recovery will strengthen over the coming year.” A construction recovery could help the broader economy, which has struggled to emerge from a recession in 2024 and at the end of June was still smaller than year-earlier levels. The RBNZ has cut the Official Cash Rate by 300 basis points to 2.5 per cent since starting its easing cycle in August last year. Most economists expect the benchmark will fall to 2.25 per cent later this month. House prices climbed for a second straight month in October, according to property consultancy Cotality, formerly CoreLogic. Today’s data showed residential approvals rose 3.6 per cent to 34,882 in the 12 months to September from the year-earlier period. Consents for apartments surged 48 per cent, although permits for retirement village units dropped 33 per cent. BLOOMBERG