NZ: Dwelling consents up 10.8% in November – Westpac

Satish Ranchhod, Senior Economist at Westpac, notes that New Zealand’s residential consent issuance rebounded in November, rising 10.8% over the month and it was even stronger than the 7% increase they had factored in.

Key Quotes

“The lift in consent issuance was driven by a rise in the multiple consents category (i.e. apartments, townhouses, etc), which offset a continued decline in stand-alone dwelling numbers.”

“Underlying the pick-up in consent issuance was firmness in Auckland, where there were 10,700 new dwellings consented in the year to November. That’s up 5% on the previous year. Some of this is due to retirement developments. However, there has also been a 23% rise in apartment consents in Auckland over the past year.”

“Importantly, if Auckland can sustain the pace we’ve seen in recent months, it would finally start eating into its significant shortfall of housing (albeit, very gradually).”

“Dwelling consent issuance has also picked up in other parts of the country, including Wellington and Otago. Consent issuance in Canterbury has slowed since the peak of the rebuild. However, it has flattened off at quite healthy levels.”

“We expect that the level of residential building activity will remain elevated for some time. However, we continue to expect that building activity will increase at a gradual pace over the next few years. As we’ve highlighted for some time, rising costs, as well as difficulties sourcing skilled labour and credit have provided a brake on activity.”