Tuesday, 09 September 2008

The slump in the amount of work in the building market has hit rock bottom, says Waikato builder Peter Santner.

The volume of residential construction nationally fell for three consecutive quarters to June, sinking a seasonally adjusted 15.3 per cent for the period, according to Statistics New Zealand figures just out.

Mr Santner, of Cambridge Homes, thought the sector was at it's lowest ebb, and would continue there for a bit longer before picking up. "I think we are all feeling the slowing economic climate that's upon us."

The seasonally adjusted value of residential building work fell 7.3 per cent in the June 2008 quarter, on the previous quarter and non-residential work fell 3.6 per cent. The figures do not give a regional breakdown, but the builders believed it was reflective of the Waikato.

The unadjusted value of residential building work for the year to June was $8.42 billion, up 5.6 per cent on the previous year.

John MacDonald, of John MacDonald Builders and president of Waikato Master Builders, said Waikato was due a slow down on the back of a real high. However, he said the slowdown in the building of new homes had been offset by a demand in alterations.

"Most people I'm talking to are quite positive. I haven't heard of any Master Builders that are really struggling and laying off heaps and heaps of staff."

The higher-end of the market remained buoyant due to the strong farming sector in the Waikato. Non-residential work also declined for two consecutive quarters. The seasonally adjusted volume of all building work fell 5.8 per cent in the June quarter, following a 6.5 per cent fall in the March quarter.

For the year ended June, the unadjusted value of all building work was $13.49 billion.

ASB economist Jane Turner said the data was weaker than expected. High interest rates, slowing net immigration and increased unemployment had slowed demand for housing.

Economist Robin Clements said even if the falling number of residential building consents bottomed out, residential building could fall further in the second half of the year.

(Source Waikato Times, by Nikki Preston)