Factors of production

Supply of trades and building labour, and the cost of mortgage borrowing.

Labour market

The number of people employed in the construction industry has increased steadily and peaked at 191,700 in the December 2006 quarter. However this has since declined and was recorded at 176,200 during the September 2007 quarter. This was a 6.2 percent decrease in employment numbers from the June 2007 quarter.

^{Source:  Statistics New Zealand}

Supply of trades and building labour

The Job Vacancy Index from the Department of Labour measured a 0.9 percent increase for the total job vacancy index for the year to September 2007.

The Building Trade Vacancy Index (which measures the change in advertised vacancies for building trade occupations over time) rose 5.7 percent for the year to September 2007.

^{Source:  Department of Labour}

Other factors of production

The cost of construction industry inputs measured by the Producer Price Index from Statistics New Zealand increased 4.4 percent for the year ended September 2007. The price of ready-mixed concrete increased 2.5 percent, while the price of framing timber rose 9.6 percent over the same period.

Cost of mortgage borrowing

^{Source:  Reserve Bank of New Zealand}

Floating rate mortgages have been increasing since the end of 2004 as the Reserve Bank tightened liquidity conditions. However, fixed mortgage rates increased at a slower rate as competition between banks to lend on fixed mortgages tended to depress increases.

During September 2007 fixed rates for residential bank mortgages averaged around 9.1 percent. Floating rates averaged 10.6 percent.