New Zealand Home Building Permits Jump to Highest Since May 2008

New Zealand building approvals surged to a 4 1/2 year high in December led by apartments and retirement village units as well as more consents in the earthquake-devastated Canterbury region.

Permits for dwellings rose 9.4 percent from November to 1,566, the most since May 2008, Statistics New Zealand said in Wellington. Excluding apartments and units, they fell 1 percent.

A rise in planned construction adds to signs of a revival in the property market, led by low interest rates and rebuilding in Christchurch city and the surrounding Canterbury district after earthquakes in 2010 and 2011. Central bank Governor Graeme Wheeler will probably leave the official cash rate unchanged at a record-low 2.5 percent tomorrow.

“There are emerging trends that are beginning to argue for less in the way of cash rate stimulus,” Craig Ebert, senior economist at Bank of New Zealand Ltd., said in a Jan. 28 note. “There is accumulating evidence of a construction rebound.”

Economists expected a 6 percent gain, according to the median of five forecasts in a Bloomberg News survey. New Zealand’s dollar was little changed after the report, buying 83.92 U.S. cents at 10:48 a.m. in Wellington.

Approvals in the three months through December rose 7.5 percent from the July-September period, today’s report showed. Excluding apartments, approvals rose 10 percent.

New Zealand’s effective home-lending rate in November was the lowest since records began in 1998, according to the Reserve Bank of New Zealand. The central bank has kept the official cash rate at 2.5 percent since March 2011. Seven of 16 economists surveyed by Bloomberg News forecast Wheeler will raise borrowing costs this year.

Approvals rose 24 percent in 2012 from 2011 to a four-year high, the statistics agency said, citing unadjusted figures. Consents in Canterbury surged 69 percent and Auckland permits jumped 21 percent, it said.

Editors: Chris Bourke, Michael Heath

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