Big jobs to fuel building surge
Monday 1 November 2004
Rising interest rates are not yet cooling the building sector, now predicted to continue growing rapidly in the year ahead.
By The LandlordBut growth is predicted to ease in 2006.
The latest forecast from quantity surveyors Rider Hunt predicts an 18 per cent increase in the value of non-residential building work put in place in the year to March 2005.
The forecast comes just as Statistics Department figures showed a 42 per cent increase in non-residential building work in September compared to September last year.
Rider Hunt said some of the heat is forecast to dissipate the following year when growth should slow to just 5 per cent, as a result of softer household consumption growth, interest rate rises, a reduction in disposable income and a downturn in house-building and net migration.
The Rider Hunt survey, prepared by the Institute of Economic Research, found that construction industry growth was on a par with that of the mid-1990s construction boom.
Read More - Opens in a new window
Commenting is closed
Auckland’s housing market saw another slump in sales volumes in May but prices are holding steady, according to the city’s largest real estate agency.
Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.
Banks have not relaxed loan-to-value ratio limits for investors, despite the Reserve Bank's move to scrap LVR rules.