The Press TUESDAY, OCTOBER 22, 1974. Decline in the number of housing permits

Press, Volume CXIV, Issue 33671, 22 October 1974, Page 16

The Press TUESDAY, OCTOBER 22, 1974. Decline in the number of housing permits

New houses and flats are still being completed in record numbers. But this high level of building is not likely to continue for very long. Requests for permits to build new houses and flats have begun to decline. Although the total value of the dwellings for which permits are issued has continued to increase, the higher value can easily be explained by inflation. The figures, recently produced by the Government Statistician, suggest that considerably fewer new dwellings will be available next year than have been produced this year to meet the continuing demand. Some of the decline in the number of permits being issued may be attributable to the persisting shortage of serviced sections. This shortage has been caused, in part, by wet weather and by shortages of materials, labour, and equipment among contractors attempting to develop subdivisions. It may be that when supply problems have been relieved and when the weather improves, more sections will become available and a larger number of new permits will be sought A substantial increase in the number of permits customarily begins in January and a peak is usually reached in early spring in anticipation of construction during the summer. But the steady nature of the decline, and its size, this year suggest that more is involved. Deferments and refusals under the building programming regulations announced in the last Budget may account for the sharp drop In June while some uncertainty prevailed. The difficulties prospective home owners are encountering in raising money to finance the construction or purchase of a new house is probably the main reason why fewer permits are being applied for. The trend is yet another symptom of the general deterioration of the country’s economic situation and a warning of the extent to which New Zealanders may have to do without until major economic problems have been disposed of. Fewer starts on new housing can only mean delay in ending the country’s housing shortage. The shortage has been accentuated by record immigration in the last two years—a trend which, it is to be hoped, will be further checked by measures to be announced by the Prime Minister (Mr Rowling) tomorrow. This delay is part of the economic medicine that the country will have to take if inflation is to be brought under control and the decline in the country’s overseas reserves dealt with responsibly. Fortunately, the number of permits being issued remains high enough to prevent any serious damage being done to the building industry. Indeed, without the excessive pressures that were exerted last year, the industry may be more efficient, more productive, and be able to give better value for money. Delays and shortages have been expensive. The effects on property values are uncertain. Some respite in the ever-rising cost of sections may be foreseen; some developers may even find that less desirable sections become hard to quit. But the decline in permits cannot yet be regarded as having a marked effect when building land is still scarce.