New Zealand’s housing supply problem appears to be improving, albeit slowly.
Nationwide building work rose 1.8% by volume in the December quarter, on top of an almost 10% jump the quarter before.
But in the December quarter, the lift in activity was not just seen in quake-hit Canterbury.
Westpac chief economist Michael Gordon said the statistics backed the bank’s view that construction activity would bounce strongly over the next couple of years.
“We’ve also been highlighting that construction booms are usually accompanied by construction cost inflation, which tends to filter out into generalised inflation over the course of several years. This leg of our forecast is yet to be tested, but we don’t think the result will be any different this time.”
The regional breakdown of work by value showed a 3% increase in Auckland and a steady lift in housing contruction. Christchurch’s building work is now 20% up on the peak of the last boom.