31 Mar 2011

Builders can't see upside to Christchurch rebuild

6:02 pm on 31 March 2011

Some builders say the rebuilding expected in Christchurch may not be enough to boost the country's struggling industry.

Figures from Statistics New Zealand show that consents for new houses fell to a two-year low during February, before the earthquake on the 22nd.

When apartments are included, the consents fell by 9.7% compared to the previous month, to a total of 973.

The Certified Builders Association says the rebuilding in Canterbury will be localised and spread over many years, and operations manager Jason McClintock doubts it will have a significant impact on builders in other parts of the country.

"I've got to be honest," he says, "the builders are sitting on the edge of their seats, waiting for the upturn.

"They're doing a little maintenance, jobbing work that's just carrying them through. The margins are down, it's just day-to-day stuff."

Lowest point already reached?

New permits in Canterbury suffered the largest fall of any region, which UBS Investment Bank senior economist Robin Clements says dented the already declining numbers of consents.

Statistics New Zealand says, however, that it cannot be sure how much of the drop nationally in February was due to the disruption in Christchurch.

Excluding Canterbury, consents for all dwellings fell 7.5%.

Goldman Sachs economist Philip Borkin says February house sales data suggests the building industry had already reached its lowest point when the quake hit.

BNZ's head of research, Stephen Toplis, says about 15,000 new consents are expected this year - but 22,000 are needed to support population growth, and that doesn't take into account the rebuilding necessary in Christchurch because of the quake.

At the peak of the building boom there were 31,000 consents.