Rate rise 'nail in the coffin' for house building sector

The Reserve Bank's interest rate rises are damaging the country's house building sector, according to Jennian Homes.

Richard Carver, director of the national building business, said consumers were holding back from building and yesterday's OCR rise was a further nail in the coffin.

The Government caused inflation with its GST rise, ACC levy increases and the emissions trading scheme, Carver said.

Statistics New Zealand building consent data due out today could show further falls in the house building sector, where 15,894 new dwelling units with a floor area of 3.1 million square metres were built in the year to May.

Those places, including additions and alterations to existing houses, were worth $5.6 billion, down on the 28,762 new houses and apartments built in the year to May, 2005 which, including additions and alterations, were worth $6.9 billion.

Carver said the two latest interest rate rises were unwarranted and premature and he also attacked economists for forecasting pent-up new housing demand.

To read the full NZ Herald article, click here

Posted: 30 Jul 2010

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