Bob Dey has been checking the building consent numbers and notes that we have now experienced three months of less than 1,000 consents per month.
We do expect that will inevitably pick up once Christchurch demolitions & consents pick up, probably late this year….unless of course (touch wood it never happens) there is another sizeable earthquake.
Over in the US, a Wisconsin commentator bemoaning the continuing housing slump notes:
Additionally, the building of new houses continues to decline. We reached a peak of activity in 2006, with over 2 million units being built. The latest statistics indicate an annual level of activity of about 400,000. In Wood county there were only 36 new permits applied for in 2010, which was a decline from the previous year of 26%.
In the case of the US there still seems to be substantial inventory – whether from development or foreclosures – to work through before they see real estate price growth. New Zealand doesn’t seem to have the same inventory problem…in fact somewhat the reverse…but what we do have is a severe lack of investment capital. Those that are making money seem more intent on reducing their debt rather than doing deals….leaving banks increasingly scurrying to actually lend.
Anecdotally, with appropriate mortgage insurance cover for the bank in question, some banks are advancing close to 90-95% financing again. However, with limited capital gains expected, the property market remains cautious. As for capital inflows into dairying and other export-related industry, we hope to see some signs of increase in the coming months, if not already.