KEY POINTS:
Growth in commercial building will continue to outstrip residential building over the next six months, say economists.
Statistics New Zealand figures comparing residential and non-residential building consents for November are due out on Monday.
Economists spoken to by the Business Herald this week said growth in non-residential building would stay strong for the first half of 2008, while growth in residential building would trend downwards as high interest rates, finance company collapses and a falling housing market put the squeeze on property speculators.
In October, the value of new non-residential building consents was up $51 million on October 2006, to $381 million, while the value of residential building consents was down $23 million to $646 million.
ANZ National Bank senior economist Khoon Goh said the decline in residential building growth would continue for the first half of 2008, as this year's finance company collapses translated into less funding for new apartment buildings.
However the non-residential building sector would continue to grow, with strong activity already in the pipeline and a shortage of good quality commercial and office buildings.
BNZ head of research Stephen Toplis said high interest rates and falling house prices would lessen the incentive for people to speculate in residential building. On the other hand, the strong New Zealand dollar would help growth in commercial building by allowing low-cost imports for key building materials.
ASB chief economist Nick Tuffley said dairy cash and the high cost of housing in the city would make urban areas less buoyant than rural areas. In the longer term, funding from investment vehicles, like KiwiSaver, would start to trickle through and boost commercial building growth.
