Increasing interest rates are now starting to bite, fully for the first time, as evidenced in the building consent figures released recently, RMBF chief executive Pieter Burghout says.
For March 2008 there were 1567 new residential consents issued, 702 less than the same period in 2007.
Also, for the first time in more than a year, the value of residential and non-residential consents was down for the month.
Year to date figures still show an increase in consents issued overall of $494 million (4.3%), so the sector is still strong by dollar value.
“It’s time for the Government and Reserve Bank to consider the macro-economic settings — including interest rates — that are now having a deep and direct impact on the construction sector,” Mr Burghout says.
The largest decreases regionally in residential consents were in Auckland, Waikato and Canterbury — by number and by value. Gisborne, Nelson and Otago all showed increases in the number of consents issued compared to March 2007.
In the non-residential market the largest decreases by value for March 2008 were for offices and administration buildings, hospitals and nursing homes, and shops, restaurants and taverns.
However, for the year ended March 2008, these consents were valued at $4264 million, an increase of 7.4% from the March 2007 year.
The RMBF still predicts that the residential building sector will pick up again around the last quarter of 2008 or the first quarter of 2009, and that the commercial sector will remain relatively strong overall throughout the year.
“But, we do strongly recommend to the Government and the Reserve Bank that it re-consider the policy settings that are forcing a softening in the sector — more rapidly than would be preferable,” Mr Burghout says.