October 08 was the lowest monthly total of building consents since 1992. Statistics NZ say there were 1173 consents authorized last month, and seasonally adjusted, excluding apartments, the figure was 7% down on September 2008’s. There were some apartments, 50, authorized but this too was low, the lowest since April 2000, apart from March 08 when a similar number were authorized.
Also released today, were the results from the latest Household Economic Survey (HES Income) and they show weekly mortgage payments rose from $256 to $328 between 2006/07 and 2007/08 (up 27.8 percent), due mainly to an increase in mortgage interest payments. Coupled with the $2 a litre petrol surprise we had, its little wonder things started to slow a bit.
They go on to say …In 2007/08, 28 percent (135,700) of New Zealand households with a mortgage paid over $500 per week in mortgage payments, up from 18 percent (86,300) in 2006/07.
The highest median weekly mortgage payments were made by those living in the Auckland region ($472); payments for the remaining regions were: $350 in Wellington, $307 in Canterbury, $262 in the Rest of the North Island region, and $242 in the Rest of the South Island region.
For households who paid rent, median weekly household expenditure on rent was $225 per week in 2007/08, up from $210 in the previous year (up 7.1 percent).
Looking at this in context, it certainly has had the desired effect that Dr Bollard wanted to achieve, and put a damper on the property market.
Where to from here?
With building consent authorizations being so low, any marked short term increase, for any reason, in immigration, returning ex-pats could definitely put pressure on certain parts of the country. And were this to happen, keeping in mind I said were, then the lag effect of new build construction evidenced by those low consent figures is something that would take 1-2 year to completely remedy.
Just my observations.
HES (Income) is a shortened version of the three-yearly full Household Economic Survey. It ran for the first time in the year ended 30 June 2008, and will run in the two years between the full HES to collect data on household and personal income, living standards, and housing costs.
SOURCE – Statistics NZ