This article is from the Australian Property Journal archive
The number of building approvals in New Zealand bounced just 3.9% in January, lifting the annual rate of growth to -5.2%oya (from -21%oya in December).
The ‘dead-cat bounce’ in January followed a 4.9%m/m decline in December. In fact, the 3.9%m/m gain in January follows a cumulative 21% decline in the three months to December.
Building consents in New Zealand have been trending down since August 2006. The sustained weakness in building approvals over the past four months has kept the annual rate of growth in negative territory (-5.2%oya), and more than reversed the short-lived resurgence in approvals over the three months to September.
In the three months to September building approvals climbed 20%. Whereas, in the three months to December, building approvals dropped a 21%.
The downward trend in building approvals over the past six months supports our view that New Zealand’s housing market continues to cool, albeit slowly.
Yesterday’s numbers alone are, however, not enough to keep the RBNZ from tightening policy next week, but should provide the RBNZ with some comfort on the outlook for the overheated housing market.
By Jarrod Kerr, economist, JP Morgan.*
Australian Property Journal
