House building slowdown not enough to stop another OCR hike

Wednesday 30 June 2004

A slowdown in house building is setting in, but the fall off is not big enough to stop the Reserve Bank of New Zealand lifting its benchmark interest rate next month, economists say.

By The Landlord

Statistics New Zealand figures out today showed house building consents were down 0.5 per cent in May, following average falls of about 5 per cent in the past three months.

Consents to build apartments fell a seasonally adjusted 5.6 per cent in May, reversing a rise in the previous month. Plans to build all other homes rose 0.7 per cent last month.

Wellington region consents bounced back from a big dip in April to 224 – almost as strong as the same month last year.

National Bank chief economist John McDermott said the while the national consents were at historically high levels, "but they have come off the incredible highs."

The 31,793 consents issued in the May year were the highest 12-month total since April 1976.

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