Jan. 9 (Bloomberg) -- New Zealand building approvals for detached houses surged to the highest in 2 1/2 years in November amid record-low interest rates and rebuilding in the earthquake-devastated Canterbury region.
Permits for dwellings excluding apartments rose 4.6 percent from October to 1,382, the most since May 2010, Statistics New Zealand said in Wellington today. Total approvals fell 5.4 percent as apartment consents slumped to a 19-month low.
Increases in construction plans add to signs of a revival in the housing market, led by low mortgage interest rates and by rebuilding in Christchurch city and the surrounding Canterbury district after earthquakes in 2010 and 2011. Central bank Governor Graeme Wheeler on Dec. 6 said lower funding costs were helping keep borrowing costs at bay, adding he will be monitoring the housing market for signs of emerging inflation pressure.
“Conditions have certainly eased on the interest rate front,” Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington, said in an interview yesterday. “We all know interest rates need to be on the low side but just how low?”
New Zealand’s dollar was little changed after the report, buying 83.65 U.S. cents at 10:48 a.m. in Wellington.
New Zealand’s effective home-lending rate in October was the lowest since records began in 1998, according to central bank figures.
The central bank has kept the official cash rate at a record-low 2.5 percent since March 2011. Eight of 16 economists surveyed by Bloomberg News forecast Wheeler will raise borrowing costs this year.
Total approvals rose 20 percent from November last year, the statistics agency said, citing unadjusted figures. Consents in Canterbury surged 71 percent to the highest in more than five years, it said. Auckland approvals were little changed.
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