The value of residential building work put in place rose at a slower pace in the third quarter of 2016, reflecting a more modest pace in Auckland and Canterbury.
The seasonally adjusted value of residential building work rose 4.3 per cent in the three months ended September 30 compared with the second quarter, when the increase was 7.4 per cent, Statistics New Zealand said. Building work volumes grew a seasonally adjusted 2.4 per cent in the latest three-month period, down from 5.7 per cent in the second quarter.
Analysts are looking for signs that measures to cool the Auckland housing market, where demand is spilling over into other regions, are working. Realtor Barfoot & Thompson this month said a decline in the average house price in the city last month may have signalled a "turning" point after seven years of increases, while the Reserve Bank said in its six-monthly financial stability report that house price inflation in Auckland had softened in recent months.
Total building volumes rose 1.4 per cent, seasonally adjusted, in the third quarter, for an annual gain of 16 per cent, while the value rose to 3.2 per cent for an annual 22 per cent increase. The value of building work in Auckland fell 0.2 per cent and in Christchurch declined 1.5 per cent.
"Building work put in place was slightly weaker than expected. However, we retain our Q3 GDP forecast of 0.8 per cent," said Jane Turner, economist at ASB Bank. "Construction activity continues to grow robustly across NZ. With demand at extremely high levels, construction cost inflation continues to accelerate."
