Recovery in house construction predicted to start next year

House building in the $12 billion construction sector will recover soon, according to a report out yesterday from consultants BIS Shrapnel.

The business released a study of New Zealand's building market which predicted the sharp downturn in new house starts would end and recovery would start in the first three months of next year.

Adeline Wong, BIS Shrapnel senior project manager, said: "We expect weak dwelling approvals to persist for the whole of 2009 before a modest rebound in the March quarter of 2010.

"A combination of strengthening economic growth, low interest rates, improving home affordability, pent-up housing demand, higher net overseas migration levels and an expanding housing stock deficiency will drive a strong rebound in dwelling consents in 2010/11 and 2011/12 before stabilising over the following two years to 2013/14," Wong said.

Statistics New Zealand recorded that in December new house starts slumped to the lowest level in more than 20 years.

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Posted: 10 Feb 2009

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