RMBF says building activity improved but still low

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The Registered Master Builders Federation (RMBF) says the latest building consent figures released recently indicate a continued pick-up in activity compared to 2011, but a decrease in consent numbers for June 2012 compared to May 2012.

Statistics New Zealand figures show 1277 new homes and apartment building consents issued for June 2012 showed a 28% increase on June 2011, but a 6.9% decrease on the previous month of May 2012.

2011 lowest level since records began
RMBF chief executive Warwick Quinn says 2011 saw the lowest level of building activity since records began in 1965, and was one of the hardest years in living memory with a little over 13,500 new home consents issued.

However, since December 2011 the market has shown steady improvement so that in the six months to June 2012, 7740 new homes and apartments had been consented which, when annualised, results in a forecast of 15,500 to 16,000 new consents for 2012 — or about a 15% increase on 2011.
Mr Quinn says the growth seems to have stabilised to an average of between 1200 and 1300 new consents per month nationally, and there was no distinguishable trend except perhaps for the Canterbury region which is tending to exhibit more consistent levels of growth than the rest of the country.

He says the RMBF is expecting Canterbury to continue to pick up while the rest of New Zealand remains patchy.
“It is interesting to compare consent activity between regions. Last month Auckland and Canterbury showed the greatest increases, while this month it was Wellington, Otago and Canterbury.”

Overall trend important
While that is a comparison with regional activity 12 months ago, it is the overall trend that is important.
Mr Quinn says while things have improved compared to 12 months ago, the market remains very tough, and New Zealand is still not building enough new homes — which should be in the order of 20,000 to 25,000 per annum.

However, he says there has never been a better time to build, with low interest rates and a highly competitive market, but this window will close once the Canterbury rebuild starts in earnest and the economy picks up again.