Jennian Homes says many people lack the confidence to build a new home. Photo / Supplied
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.
Instead, Kiwis were shifting to Australia. People in their 20-plus years were happy to live with their "over-burdened" parents and most people in non-essential jobs lacked the confidence in their employment prospects to commit to building a new house, Carver said.
GST would push up the price of land and buildings and any staged payments by people in the midst of building made after October 1 would incur higher GST, Carver said.
Meanwhile, Mark Binns, chief executive of two Fletcher Building divisions, said Stonefields, the new Auckland housing estate, was a key area of growth.
Landco and Fletcher Residential are working on the 110ha site, the largest undeveloped slice on the isthmus in Auckland City which will have 2900 homes for 6500 people, a school and shopping village.
Last month, Westpac economists predicted a house building surge in the next two years, with larger firms less reliant on finance than developers entering the sector.
Chief economist Brendan O'Donovan and senior economist Dominick Stephens expect the sector to grow 23 per cent next year, with even more places needed in 2012 because of a housing shortage.
See a history of Reserve Bank OCR rates here.
