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Value of residential building work rises

NZ Newswire logoNZ Newswire 15/12/2016

The value of residential building work put in place rose at a slower pace in the third quarter of 2016, reflecting a more modest pace in Auckland and Canterbury.

The seasonally adjusted value of residential building work rose 4.3 per cent in the three months ended Sept. 30 compared with the second quarter, when the increase was 7.4 per cent, Statistics New Zealand said.

Building work volumes grew a seasonally adjusted 2.4 per cent in the latest three-month period, down from 5.7 per cent in the second quarter.

Analysts are looking for signs that measures to cool the Auckland housing market, where demand is spilling over into other regions, are working.

Realtor Barfoot & Thompson this month said a decline in the average house price in the city last month may have signalled a "turning" point after seven years of increases, while the Reserve Bank said in its six-monthly financial stability report that house price inflation in Auckland had softened in recent months.

Total building volumes rose 1.4 per cent in the third quarter, for an annual gain of 16 per cent, while the value rose to 3.2 percent for an annual 22 per cent increase. The value of building work in Auckland fell 0.2 per cent and in Christchurch declined 1.5 percent.

"Building work put in place was slightly weaker than expected. However, we retain our Q3 GDP forecast of 0.8 per cent," said Jane Turner, economist at ASB Bank.

"Construction activity continues to grow robustly across NZ. With demand at extremely high levels, construction cost inflation continues to accelerate."

In actual terms, the value of residential building work rose 25 per cent from the same quarter of 2015 to $3.3 billion, with Auckland work rising 32 per cent to $1.2 billion and Canterbury gaining 1 per cent to $646 million.

The actual value of non-residential building work rose 18 percent from a year earlier to $1.9 billion, led by a 33 per cent gain to $612 million in Auckland and an 8.4 per cent increase to $553 million in Canterbury.

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