New Zealand home-building approvals dipped in March to a 17-year low, and may have reached their nadir, amid signs the housing market has picked up from its trough last year.
Approvals for new dwellings sank 4.6% last month, seasonally adjusted, continuing a downward trend that began in June 2007 to the lowest level since the series began, according to Statistics New Zealand.
Excluding apartments, the number of consents slipped 1.3% last month. Dwelling consents are down a quarter from the same month in 2008.
March home sales jumped 31% to 6,694 from the previous month, with the median price climbing 1.5% to $335,000 over the same period, according to the Real Estate Institute of New Zealand.
Cheaper lending has offset the impact of the recession as the Reserve Bank of New Zealand slashed the official cash rate to 2.5% today and indicated low rates until late next year.
“House sales have been flagging the possibility of a trough in new dwelling consents,” said Robin Clements, economist at USB New Zealand.
“Improved affordability, aided further by today's RBNZ OCR cut and indication that rates will stay low for a considerable period, and increased inward migration provide fundamental causes for anticipating a turning point.”
Goldman Sachs JBWere strategist Bernard Doyle said there was an “extremely weak level” of residential activity, but this was expected to come off its lows over the next few months as sentiment about the economy improved.
The value of non-residential building approvals fell 6.4% to $332 million from the same month last year.