NZ: Modest decline in residential dwelling consents - Westpac

Satish Ranchhod, senior economist at Westpac, notes that the New Zealand’s residential dwelling consent issuance fell 3.9% in June, reversing only part of last month’s strong increase and leaves consent issuance at elevated levels.

Key Quotes

“That was a relatively modest decline given that consent numbers rose a whopping 13.5% last month.”

“With strong issuance recently, consent issuance is now running around multi-decade highs. 34,760 new homes were consented over the past year (an increase of 6%).”

“While there have been some large month-to-month swings in consent issuance recently, the underlying trend in consent numbers points to continued strength in construction activity. We expect another strong lift in building activity over calendar 2019, and some further lift in 2020.”

“Putting all that together, we think a peak in the nationwide construction cycle is approaching and expect this to occur in 2020. Building levels are still expected to remain elevated for some time. But after this year, we don’t expect to see the same large increases in nationwide construction-related spending and employment that we did in recent years.”