Chch timber market and building booming

Press, 20 January 1984, Page 1

Chch timber market and building booming

By

PATRICIA HERBERT,

property reporter

Christchurch’s timber merchants are hard at work to supply an increased market, local and overseas.

Mr Peter Stevens, of Peter Stevens, Ltd, said that sales had doubled since August and that he had this week hired 13 more staff to cope with the workload. The company had two full shifts working in its fingerjoining section and was thinking of putting an extra half-shift on its truss factory.

He attributed the rise in local timber sales to an increase in the demand for new houses and said that the Canterbury Cottage Company, a Peter Stevens subsidiary, had also doubled its sales since August. The upturn in the residential building industry made no sense, Mr Stevens said. “We are talking about Canterbury having a depressed economy, large businesses are closing, people are moving north, and the population growth is static,” he said.

His bewilderment was shared by the president of the Canterbury Association of Timber Merchants, Mr R. J. Hawkins, who estimated there had been a 15 per cent increase in local demand since November and said that he could not fathom it. Christchurch had one of the highest levels of unemployment in New Zealand yet the timber industry was more buoyant than in other areas. Pre-cut timber firms were running seven to eight weeks behind orders.

“All of the bright fellows have an answer, but none of them make a lot of sense,” Mr Hawkins said. “It has got me beat.” The managing director of McVicar Timber Group, Ltd, Mr Gary McVicar, said that the company had taken on about 15 extra workers in the last two months to cope with the demand. He said that the upturn on the local market had been fleshed out by a dramatic increase in timber sales to Australia. The return was higher there because prices had “risen considerably” while in New Zealand they had been frozen for more than a year. The manager of C.S.I. Timber Company, Ltd, Mr Murray Williams, had also noticed a significant increase in sales, mainly to supply the Christchurch house-building market.

He had “no real explanation for it" but thought that it might be related to the impending lifting of the wage-price freeze. This theory was not widely supported and, while most accepted that the upsurge might not last, no-one thought it would end with the freeze. The executive officer of the Building Industry Advisory Council in Wellington, Mr P. Williamson, predicted that new house prices would rise 5 per cent this year but said that the increase would be gradual. It would depend on demand: Mr Williamson said that the building industry was likely to slow down again as mortgage finance dried up and before the Government “decides what it wants to do with housing policy in an election year." The number of permits issued for new dwellings in the Christchurch metropolitan area rose steadily in the second half of last year and the November figure was the highest recorded since 1981.

Housing Corporation borrowers contributed significantly to the recovery, according to the corporation’s deputy manager, Mr Brian Atkins. He said that the number of “erect loan” applications received each month had risen from about 16 to about 40. He attributed the increase to the raising of the family benefit capitalisation to $4OOO. The move had more impact in Christchurch than in Wellington or Auckland, Mr Atkins said, because land values were lower here. He also said that towards the end of last year the corporation had been “thumping out between $250,000 and $500,000 every four weeks in homeimprovement loans.” The Canterbury Savings Bank dominates the local private-sector mortgage market. Its manager, Mr Frank Dickson, said yesterday that there had been a slight increase over the last four months in the number of loans made to those wishing to build. He said that since the maximum interest-rates regulations had been introduced, the bank had increased its mortgage lending and that in December it had advanced $6% million on housing.