In New Zealand, new reports indicate that the new home construction market has slowed, drastically in 2007, marking the indications of an economic slowdown as well as a housing slowdown.
New house building is monitored by the number of consents that are provided to the construction sector. In 2007, Only 25,544 new houses were given authorisations to build. That number is the lowest since 2002. The drop equates to about 6000 fewer homes than the peak of the construction boom here in 2004.
Part of the drop in new house construction costs is the continuous high interest rates here. Rates have been high as the government tries to fight off inflation, which also continues to rise. Interest rates rose four times in 2007 to 8.25 per cent.
The worst problem for 2007 in the home construction market in New Zealand was December, a generally business month in the southern hemisphere. There, the market was done 145 units over the year prior.
Home sales in New Zealand dropped 32 per cent in December. This is according to the Real Estate Institute here. New Zealand also faces incredible housing values, that make it difficult for new home owners to purchase properties.
