RESIDENTIAL DIP, INDUSTRIAL AND COMMERCIAL RISE

 

A recent Statistics New Zealand survey released sees a decline in the building of new homes for the first three months of 2012 compared to the previous quarter. The offset is an increase in non-residential construction with factories and industrial buildings reporting the largest growth, up 38 percent ($116 million) in the quarter, resulting in a 22 percent ($434 million) annual gain. Commercial building work rose a more modest 7.7 percent ($277 million), up to 7.5 percent ($1.37 billion) annually. The residential decline can be partially explained through the changes to the official cash rate (OCR) which indirectly affect housing rates. ASB economist Christina Leung believes that such figures point to the now more urgent need for an OCR increase although does mention housing supply constraints in cities like Auckland and Christchurch as another explanation for the dip. Introduced in 1999, the OCR is controlled by the Reserve Bank of New Zealand and is reviewed eight times annually.

Source: The Daily Post, 8 June 2012 (SM)

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