N.Z. Home-Building Approvals Decline 6% in December

By Tracy Withers

Jan. 30 (Bloomberg) -- New Zealand home-building approvals fell to a record low in December as a prolonged recession and the prospect of job losses keeps consumers out of the property market.

Approvals fell 6 percent from November when they gained 4 percent, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. There were 1,113 approvals, the lowest since records began in 1982, the agency said.

Declining demand for homes adds to signs that the recession which began in the first quarter of last year will extend into the first half of 2009. Reserve Bank Governor Alan Bollard yesterday slashed the benchmark interest rate to a record low and urged lenders to pass on lower costs to consumers in order to stimulate the economy.

New Zealand’s jobless rate rose to a five-year high of 4.2 percent in the third quarter and may climb to 7.5 percent by mid- 2010, the government said this month.

Excluding apartments, approvals fell for an eighth month in December, dropping 0.7 percent, the statistics agency said.

The value of approvals for home-building, alterations and additions fell 19 percent in December from a year earlier, the agency said. Still, the value of non-residential approvals rose 16 percent led by factories and office buildings.

A collapse in the housing market last year led the economy into recession. Home-building approvals fell 28 percent in 2008 to a 15-year low of 18,456, the agency said, citing unadjusted figures. Excluding apartments, 2008 approvals declined 30 percent to a record-low 16,158.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.