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New home rate slows, but New Zealand construction at record high

Xinhua, April 29, 2016 Adjust font size:

The number of new homes approved in New Zealand tailed off in March, the official statistics agency said Friday, although the government still claimed record high building rates were helping to alleviate the housing crisis.

The number of new dwellings consented in March fell 9.8 percent to 2,315, following a 10-percent rise in February, according to Statistics New Zealand.

The total was 44 more than in March 2015.

The trend for the number of new dwellings consented showed signs of easing, but was still near the highest level since mid-2004, business indicators manager Clara Eatherley said in a statement.

Building and Housing Minister Nick Smith said the data showed overall residential investment at 9.3 billion NZ dollars (6.49 billion U.S. dollars) in the year ending March, up from 8 billion NZ dollars (5.58 billion U.S. dollars) the previous year.

The number of new homes nationwide for the year was 27,789, the highest in more than a decade, Smith said in a statement.

"I am particularly encouraged by the progress being achieved in Auckland, where housing issues are the most acute. New home construction is now at 9,566 for the year to March 2016, compared to 7,940 in 2015, and the low point of only 3,579 five years ago," Smith said.

"This is the longest and strongest sustained growth ever in home construction in the city's history."

The record investment was putting pressure on all parts of the housing supply chain, from land supply to consenting capacity in councils, from construction equipment to skilled tradespeople, but the government was addressing these issues, he said.

The Reserve Bank of New Zealand (RBNZ) has repeatedly warned that soaring house prices, especially in Auckland, the country's largest city and home to a third of the population, posed a risk to the country's financial stability.

On Thursday, RBNZ governor Graeme Wheeler warned that house price inflation in Auckland was be picking up again, after showing signs of easing, with house prices remaining at very high levels and market pressures building in some other regions. Endit