NZ dwelling consents down 9.6% in October 2017 - Westpac
Satish Ranchhod, Senior Economist at Westpac, explains that volatility in apartment number pulled New Zealand’s overall consent numbers down, and nationwide build levels have flattened off. However, we’re seeing positive signs in Auckland, he further adds.
“Residential consent issuance fell 9.6% in October. That was a larger pull back than we had expected. Much of this month’s decline was due to a pull-back in apartment consents (which are lumpy on a month-to-month basis), though consents for standalone homes were also down.”
“Looking through the normal month-to-month volatility in consents, a couple of interesting trends stand out. First is the overall level of consent issuance. It’s been close to flat for a year now. As we’ve highlighted for some time, difficulties sourcing skilled labour and credit have provided a brake on activity. We expect that overall construction levels will increase only gradually over the next few years.”
“However, the other notable feature is what’s been happening in Auckland, where concerns about a housing shortage are most acute. Issuance in our largest city picked up back in August. And while it has eased back a little, most of those earlier gains have been sustained. In fact, if Auckland can the current monthly pace, it would finally start eating into its significant shortfall of housing (albeit, very gradually). However, it is important to remember that some of the rise in Auckland consents is due to retirement developments. In addition, those headwinds for the construction sector mentioned above are likely to bite hardest in Auckland. Nevertheless, this is a positive development, which we’ll continue to watch closely.”
“Consent issuance in Canterbury is well down on the levels we saw during the peak of the rebuild. However, it has flattened off at quite healthy levels. Dwelling consent issuance has also held up at firm levels in other parts of the South Island and in the Waikato. In contrast, October saw some softening in dwelling consent numbers in Wellington and other parts of the North Island.”