Non-residential building spurts to 12 year high

Non-residential construction surged to a 12 year high in the June quarter, Statistics New Zealand figures out today show.

The seasonally-adjusted value of non-residential building work rose 19.4 per cent during the June quarter, the biggest quarterly increase since March 1993.

That follows an 8.5 per cent rise in the March 2005 quarter, and shows the appetite for commercial buildings is still insatiable.

Commercial buildings, including shops, restaurants, taverns, offices and administrative buildings, accounted for about third of the quarterly rise.

New prisons also played a big part, accounting for almost half of the 18 per cent rise in the hotel and boarding house category.

After adjusting for price changes, the value of non-residential building work rose 26.9 per cent in the year to June.

In contrast, residential building eased off the gas pedal in the June quarter, with the seasonally-adjusted value of residential work declining 1.1 per cent, following a 6.6 per cent rise in March.

The value of residential building work has been rising for most of the past four years.

Today's solid commercial building data comes hot on the heels of Property Council figures issued yesterday showing investors received their highest returns in the year to June since the council started using its Investment Performance Index in 1989.

New Zealand composite property returns rose to 18.13 per cent from 14.62 per cent last year, with capital growth of 8.07 per cent compared with 5.02 per cent and rental income returns of 9.49 per cent versus 9.26 per cent.

Office space in the Wellington central business district was the standout performer in the latest quarter, thanks to the burgeoning public service, returning 24.57 per cent, almost double the 13.82 per cent return the June 2004 quarter.

- NZPA