Trades predict housing revival boost

Last updated 05:00 18/07/2012

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Builders, plumbers, electricians and gas-fitters are all expecting a record boost from a revival in the housing market.

That's according to the latest quarterly ANZ Business Micro Scope survey of small businesses in New Zealand, which showed firms in the construction sector were the most confident of those surveyed.

Home building expectations were at their highest level since relevant data was first collected in December 1999.

Low interest rates were driving the revival in the housing market, ANZ managing director business banking Fred Ohlsson said.

"Builders, plumbers and electricians are gearing up as historically low mortgage rates breathe new life into the property market.

"Firms see building activity lifting nationwide as new homes are built or owners extend or renovate what they have amid renewed sales activity."

Building intentions rose sharply in the three months to June for both residential building (net 39 per cent, up from 32 per cent in the previous quarter), and commercial building (23 per cent, up from 19 per cent).

Low interest rates and demand for housing in Christchurch and Auckland was driving most of the new building activity, Registered Master Builders' Federation chief executive Warwick Quinn said.

The organisation was seeing more optimism among members compared with last year's levels.

Building activity had picked up in the last quarter of last year and that was continuing.

New home builds for the year were around the 15,000 to 16,000 mark, compared to 13,500 for last year, although that had been the lowest level in decades.

There was a lot of talk about the Christchurch rebuild and the Auckland house market, and with interest rates expected to be lower long-term, firms were reporting more inquiries about building from potential customers, Quinn said.

"People have started to talk and show greater signs of interest in building. But to get them across the line is still hard."

Around the rest of the country there was a feeling that there might need to be "a short catchup", in terms of new homes being built, but nothing significant, Quinn said.

"The light will go on in Christchurch and it will be a step change because of the rebuilding, it will be a hive of activity."

Quinn said the organisation had expected the rebuild activity to kick start in the second half of this year.

"But really it's anybody's guess.

"We are seeing more activity in Christchurch, particularly in Selwyn and Waimakariri."

But it was unclear if, or when, a "step change" would take place in Christchurch city.

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Meanwhile larger firms - those with more than 20 staff - reported a slight fall in construction intentions, in part reflecting delays to the Christchurch CBD rebuild.

Overall, the survey showed small business sentiment fell less than one percentage point from the March quarter and was still positive at a net 12 per cent for the June quarter.

Small firms listed low turnover, regulation and competition as their top three concerns.

The quarterly survey was started in March and surveys 250 businesses with fewer than 20 staff.


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