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WELLINGTON: The number of new dwelling consents approved in New Zealand fell in October as housing activity was sluggish, backing views the central bank will hold rates unchanged well into next year.
The number of new dwellings fell a seasonally adjusted 2.0% on the previous month compared with a downwardly revised 0.2% increase a month earlier, Statistics New Zealand said on Tuesday, Nov 30.
"It is data like today's that we believe will cement the RBNZ (Reserve Bank of NZ) to the sidelines for the time being," Goldman Sachs economist Philip Borkin said.
"We continue to believe the resumption of the tightening cycle will be in March next year at the earliest," Borkin added.
The government agency said a seasonally adjusted 1,154 new dwellings were approved in October, down 17.7% on the same month a year earlier.
The data can be volatile because of the number of apartments authorised, which totalled 24 for the month compared with 60 in September.
Excluding new apartment units, the number of seasonally adjusted consents fell 1.1% on the previous month, the fourth consecutive monthly fall and the lowest number issued since July 2009. The housing market has slowed this year amid a sluggish property sector and cautious consumers, who have put the emphasis on reducing their debt levels in the face of slow wage growth, an uncertain labour market and higher interest rates.
The Reserve Bank of NZ, which next week is expected to keep its cash rate at 3% for a third review in a row, has said any return to debt-fuelled house buying and building might jeopardise recovery.
"For a hike to occur in March, data on the housing market and other cyclical pockets of the economy will need to at least reverse their current weakening trend," Borkin said.
The total value of consents issued for the month for all residential buildings, including alterations and additions, was NZ$415 million (RM976.19 million), down 8% on a month earlier.
The value of consents also reflected a rise in the rate of the goods and services tax, which increased to 15% from 12.5% on Oct 1, although the government agency said it could not separate out the impact of the rise.
The value for the year to Oct 31 was NZ$5.7 billion, up 14.8% on a year earlier.
The value of consents issued for non-residential buildings fell 25% on the previous month to NZ$272 million, and was 17% lower than a year ago.
The value of consents for all buildings in the year through October was NZ$9.9 billion, down 1% from a year earlier. — Reuters
The number of new dwellings fell a seasonally adjusted 2.0% on the previous month compared with a downwardly revised 0.2% increase a month earlier, Statistics New Zealand said on Tuesday, Nov 30.
"It is data like today's that we believe will cement the RBNZ (Reserve Bank of NZ) to the sidelines for the time being," Goldman Sachs economist Philip Borkin said.
"We continue to believe the resumption of the tightening cycle will be in March next year at the earliest," Borkin added.
The government agency said a seasonally adjusted 1,154 new dwellings were approved in October, down 17.7% on the same month a year earlier.
The data can be volatile because of the number of apartments authorised, which totalled 24 for the month compared with 60 in September.
Excluding new apartment units, the number of seasonally adjusted consents fell 1.1% on the previous month, the fourth consecutive monthly fall and the lowest number issued since July 2009. The housing market has slowed this year amid a sluggish property sector and cautious consumers, who have put the emphasis on reducing their debt levels in the face of slow wage growth, an uncertain labour market and higher interest rates.
The Reserve Bank of NZ, which next week is expected to keep its cash rate at 3% for a third review in a row, has said any return to debt-fuelled house buying and building might jeopardise recovery.
"For a hike to occur in March, data on the housing market and other cyclical pockets of the economy will need to at least reverse their current weakening trend," Borkin said.
The total value of consents issued for the month for all residential buildings, including alterations and additions, was NZ$415 million (RM976.19 million), down 8% on a month earlier.
The value of consents also reflected a rise in the rate of the goods and services tax, which increased to 15% from 12.5% on Oct 1, although the government agency said it could not separate out the impact of the rise.
The value for the year to Oct 31 was NZ$5.7 billion, up 14.8% on a year earlier.
The value of consents issued for non-residential buildings fell 25% on the previous month to NZ$272 million, and was 17% lower than a year ago.
The value of consents for all buildings in the year through October was NZ$9.9 billion, down 1% from a year earlier. — Reuters
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