Oct. 30 (Bloomberg) -- New Zealand’s home-building approvals rose for the fifth time in six months in September, signaling that lower mortgage rates are helping to kick-start demand for property.

Permits increased 3.3 percent from August, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. Excluding apartments, approvals rose 2.8 percent to a 13-month high.

Reserve Bank Governor Alan Bollard yesterday said he is unlikely to raise borrowing costs from a record low until the second half of 2010 to help the economy emerge from its worst recession in three decades. There are signs the economy is growing again, he said.

“The pace of increases is not substantial, but is in line with what would be expected given the increase in house sales, low interest rates and improvement in net migration,” said Philip Borkin, an economist at ANZ National Bank Ltd. in Wellington.

New Zealand’s dollar bought 73.24 U.S. cents at 11:30 a.m. in Wellington from 73.27 cents immediately before the report.

Economists monitor approvals excluding apartments because apartment consents are volatile. There were 155 apartment approvals in September, up from 30 in August and down from 366 in September last year.

Excluding apartments, approvals in the three months ended Sept. 30 increased 31 percent from the three months through June.

House Sales

Economists expect building approvals will keep pacing gains in house sales, property prices and immigration.

Home sales rose 44 percent in September from a year earlier, the Real Estate Institute reported this month. House prices increased 1.9 percent from August. The number of permanent migrant arrivals exceeded departures by 17,043 in the year ended Sept. 30, the most since 2004, the government said last week.

“With house sales still rising, further consent increases are likely over the next six months and this should see residential construction make some reasonable contributions to growth over 2010,” said Borkin.

Property construction has slumped from a year earlier amid a recession, which began in the first quarter of last year, and as a credit crisis curbed development projects. In the 12 months ended Sept. 30, approvals fell 35 percent from a year earlier.

The value of approvals for home building and renovations declined 14 percent in September from a year earlier to NZ$480 million ($352 million), the agency said.

The value of non-residential building approvals slumped 43 percent to NZ$257 million, the lowest since January 2007, led by offices and warehouses. The year-earlier month was also boosted by approvals for education buildings.

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

Last Updated: October 29, 2009 19:07 EDT