Bay boom continuing

The Bay of Plenty is continuing to enjoy a period of strong growth, according to the latest Westpac Regional Roundup released today.

Regional economic confidence continued to lift and the region as a whole appeared to have been less affected by the commodity price downturn hitting other regions.

For three quarters in a row, the Bay of Plenty has had the highest regional economic confidence in the country. Its unemployment rate is down sharply for the second quarter in a row, indicating genuine trend rather than a sampling error.

House prices in December were nearly 14 per cent higher than a year earlier, with growth having accelerated.

New dwellings are being consented at a rate not seen in some time, mostly in Tauranga, and at almost double the rate seen over the last five years. These big ticket investments also point to strong household confidence in the local economy.

Tourism and its associated industries like retail and recreation are also benefitting from a rise in guest nights, which breached 900,000 for the first time ever in the December quarter.

The only negative was a small decline in new vehicle registrations, as in Auckland, but registrations were still up on the same quarter a year earlier and well above five-year averages.

The strong consents growth and anecdotal evidence of people leaving Auckland for cheaper housing in Tauranga and elsewhere will likely support strong growth in construction activity in Tauranga in particular for some time.