New Zealand residential building approvals fall to six-year low
NEW Zealand building approvals fell to a six-year low in 2024 as high interest rates and a recession spooked home buyers and stalled developments.
Consents fell to 33,600 in the 12 months to December, Statistics New Zealand said on Tuesday (Feb 4) in Wellington. That’s down from 37,240 in 2023 and the lowest since 2018.
New Zealand’s economy suffered a deep recession last year, contracting 2.1 per cent in the six months to September. While the central bank began cutting interest rates in August, high borrowing costs at the start of the year put off prospective buyers as well as builders considering residential developments.
Developers of apartment blocks and retirement villages curbed their plans as property prices fell and made homeowners reluctant to sell their homes and relocate.
Today’s report showed consents for apartments were the lowest since 2014 and permits for retirement village units were the lowest since 2013.
Still, annual consents were little changed from 33,609 in the 12 months to November, suggesting the drop in approvals may have found a floor as interest rates fall, said Satish Ranchhod, senior economist at Westpac in Auckland. The Reserve Bank cut the Official Cash Rate by 125 basis points last year and has signalled another 50-point reduction at its next review on Feb 19.
Rate cuts “will support a gradual recovery in the housing market and house prices over the course of this year”, Ranchhod said. “That combination of lower borrowing costs and a strengthening housing market will eventually support a lift in new housing development.” BLOOMBERG
Share with us your feedback on BT's products and services
